ASE | Overview

"We have our finger on the pulse of the flow of goods " (Eric Steck, CEO)

ASE has developed a system for scanning whole trains and trucks with high resolution cameras.

Many millions of goods are transported and stored globally every day. They are usually transported in containers that are loaded onto trains and trucks. These containers are reloaded and transported further several times in harbors and large container stations. Given the sheer volume of containers, it is impossible to manually record where which container is located at the moment in real time.

However, exactly this information is necessary for the modern industry, as it often produces "just in time", i.e. the goods and raw materials to be processed arrive exactly at the time when they are further processed, without having to be stored over long periods of time. Therefore, the industry must rely on knowing where which goods and which containers are located at any given time.

This currently takes place through pure manual recording (often using a clipboard and pen). Wagon numbers, hazardous goods numbers, vehicle registrations etc. are written down by a person when the vehicle is stationary at a station or harbor. To do so, it is often necessary to walk along the entire train or truck and record all numbers individually.

This is time-consuming (just a single train can consist of 40 wagons and be more than 800 meters long) and error-prone, because any incorrect digit can result in the wagons not being identified correctly.

The data are then manually entered into computer systems, which leads to further delays and errors. For the modern industry these delays and errors are a major problem for their "just in time" planning.

ASE has fully automated the recording of trains and trucks with its system. Video gates with high resolution cameras, which are placed at the entrance and exit of a station or loading terminal, were developed for this purpose. While the arriving and departing trains and trucks pass through the video gate, all of their wagons and containers are automatically scanned with the high resolution cameras, thus recording the wagon numbers, hazardous goods numbers, vehicle registrations etc. in realtime. All information is digitally available to the respective terminal operator or dispatcher of the goods immediately.

Moreover, the condition of wagons, containers or trucks is simultaneously recorded visually. Thus, replacements can be procured immediately if damage is present. Image or video data are also available as evidence for claim settlements.

In addition to industrial companies and harbor operators such as Hafen Hamburg, ASE customers also include Deutsche Bahn, the Austrian Federal Railways and the Swiss Federal Railways. In 2016, the annual turnover of ASE was approx. Euro 1.3m. In 2017, ASE is likely to achieve a turnover of more than Euro 2m.

The Business Angel of the year 2016, Dr. Tobias Engelhardt, who is also involved in the Companisto-funded start-up "Copaltec", has contributed to ASE with a high six digit sum.

To allow our customers to control the movement of their containers throughout the entire rail and road traffic live and in realtime, we offer various solutions: NUMBERCheck road & rail video gate, our DCS Damage Control System and our video surveillance systems:

NUMBERCheck

The core of the visual character recognition is the modular NumberCheck system.

With our NUMBERCheck recording and registration are fully automated. Every system features wheel sensors to detect the wheel signature of the wagon. The direction of travel, speed, number of axles, and number of wagons are also determined. All relevant train and truck data are then recorded in a central database and provided to a higher level software. This significantly reduces the error ratio during the recording of containers to below 5%.

Customers can choose from a total of 7 different modules:

• Camera-based number recognition
• Container number recognition
• Hazardous goods detection
• Condition documentation and archiving
• Wheel axle sensors
• EVU data alignment (EVU = railway operator)
• Automated invoice generation

This automation reduces handling and turnaround times in loading terminals, logistic processes can be optimized, and personnel resources better utilized.

This means both significant cost savings and increased sales, as well as process security and process optimization for customers. This allows short return on investment (ROI) periods - often below 12 months - to be achieved.

DCS

The DCS (DCS = DamageControl System) of ASE provides all necessary information about vehicle movements and thus offers a seamless proof of receipt and dispatch times (24h/7 days) e.g. of trucks.

The system is based on our OCR Gate (OCR = Optical Character Recognition) for rail & road. Here too, vehicle numbers are detected during arrival and departure by a gate, registered, and provided via interfaces to a higher level dispatch system.

Video surveillance systems

Using latest hardware components and intelligent video management systems we design a CCTV system delivering seamless image and video documentation. Our customers thus receive a seamless documentation of all security-relevant events and areas and greatest security and protection against e.g. burglary, theft and vandalism.

The business model of ASE comprises the development, design, and sale of customized solutions all the way to the installation and maintenance of the systems.

We prepare CAD plans, plan the system layout, procure hardware components, and install within a few weeks. Our IT experts then make software adjustments during a test phase to allow our customers the fastest access to the recorded data possible.

We generate turnover through the sale of hardware and software components. We also offer comprehensive services to our customers as an option after project completion. With service and maintenance agreements spanning several years, we ensure against regular fees that the ASE systems can also be optimally utilized by customers in the future.

The combination and communication between our proprietary hardware and software components facilitate high system security and accuracy and the option of optimizing and further developing the system at any time. We are well known on the market for our high level of innovation.

Sales are mainly through direct acquisition. In addition, we also present NUMBERCheck to the international audience of specialists on key industry exhibitions.  Since 2014, the logistics industry uses the "ASE freight traffic forum 4.0", a platform initiated by us for the exchange of current challenges and trends.

Extremely high detection rate of containers

The detection rate of NUMBERCheck (>95%) is achieved through high resolution IP cameras (network camera or Internet Protocol camera), mature LED lighting technology and our OCR software (OCR = Optical Character Recognition) based on a highly efficient algorithm.

Our customers repeatedly confirm that our detection rates are significantly higher than those of comparable products by competitors.

We assume that the comparable detection rates of competitors are below 90%.

Compact and robust camera

Another unique selling point is the compact and clear design of the sensors in their specially developed vandalism- proof steel column. This column also has a high recognition value already. Only two wheel axle sensors are required at the track in addition to the camera technology and lighting.

Competitors

the two competitors in the European marktes we have identified are CAMCO Technologies (Belgium) and VISY Oy (Finland). Both companies originate in road traffic surveillance and are based on so-called gate solutions which need to surround the tracks on the side and above.

Therefore, these solutions are of limited use for railway traffic. The installation of the systems of the two competitors also requires a greater setup cost. Another advantage of ASE is the use of area cameras. The slit cameras used by the two competitors require special lighting and stable passing speeds.

Since our foundation in 2002, we are proud to have relations with more than 100 customers from industry and from the railways and logistics sector. These include globally famous companies, such as Siemens, ABB, Arcelor Mittal, BASF, Deutsche Bahn, ÖBB (Austrian Federal Railways), SBB (Swiss Federal Railways) and many more.

ASE has been invited to contribute to the DIN SPEC 91073 workshop. The objective of this workshop is to work out a "standardization of the data exchange for all actors in the intermodal chain to ensure an efficient flow of information and future-proof digital communication".

ASE is also a member of various interest groups, such as SGKV (Studiengemeinschaft für den Kombinierten Verkehr e.V.) or Combinet.

We work with the two target customer groups trimodal traffic operators (combination of road, rail and water) and actors from industry with track connection or truck access. Other potential customers are rail and road tunnel operators and car hire firms. The market volume in Germany alone is estimated at 500 million euros.

Trimodal traffic operators

The trimodal traffic operators include sea and inland harbors, rail loading terminals and other transport terminal centers with combined logistics and storage. A conservative assumption of the market size of this target group in Germany assumes a volume of approx. 270 million euro and is based on the following consideration:

Potential target customers and applications in Germany are:

• 26 sea harbors,
• 115 inland harbors,
• 22 rail loading terminals,
• 53 other terminals for combined traffic, and
• approx. 4000 logistics and storage centers, of which approx. 10% may be of relevance to ASE.

 Each of these targets offers an average turnover potential between 0.3 and 1.2 million euro.

Industrial customers with track connection or truck access

The market potential for industrial customers with track connection or truck access is up to approx. 170 million euro. There are approx. 3700 private track connections in Germany, 30% of which are considered relevant. On average a turnover potential of 0.15 million euro must therefore be assumed.

Rail and road tunnel operators

There are more than 1000 railway tunnels in Germany. Assuming an ASE system for each traffic direction per side and tunnel this means a further market potential of approx. 60 million euro.

The market of the trimodal freight traffic surveillance is currently determined by three major trends:

• Railway operators are permanent cost reduction pressure with simultaneous demands for increasing their service levels without being able to generate additional income from this.
• Railway logistics companies cannot expand in space and therefore only have limited growth opportunities. This highlights the necessity for an increase in capacity, i.e. maximizing income subject to existing space conditions.
• Regulatory requirements for traffic monitoring further support the market development. The new EU Directive TAF-TSI obliges logistics companies to be able to localize the position of their trains at any time.

According to the definition of the European Conference of Transport Ministers, combined traffic is defined as intermodal transport in which most of the distance travelled is covered by rail, inland waterway or sea transport while road transport journeys are kept as short as possible.

ASE works on rails since 2012 and on roads since 2015. A logical consequence is the expansion onto waterways to close the chain in the combined traffic.

There is a funding requirement of €1,000,000 for the further expansion of the company, mainly for the acquisition of the software supplier’s IP. This saves costs for software licenses and the purchase will be profitable within a short period of time. The corresponding term sheet has already been signed. Funds are also required for the advance financing of projects, the expansion of the product range to roads and waterways (R&D costs) and to set up international sales.

The planned measures can be implemented in stages.

Since the summer of 2016 the capital venture firm Engelhardt Kaupp-Kiefer ("EKKUB") headed by Dr. Tobias Engelhardt - the Business Angel of the year 2016 - has a share of currently 45%. EKKUB is also involved with the start-up company Copaltec successfully funded via Companisto.

In March 2017 our NUMBERCheck system has received the innovation prize in the category track and infrastructure. With this prize the Privatbahn magazine awards rail technology innovation considered as trend-setting for the future rail industry.

Klaus Hoppe (Commercial Manager; CFO) and Eric Steck (Managing Director and Partner; CEO)

ASE GmbH
Lußhardtstrasse 6
76646 Bruchsal
Germany

Telephone: +49 (0) 7251 93 25 9-11
Email: investor-relations@ase-gmbh.eu

Website: https://www.ase-gmbh.com
Twitter: https://twitter.com/ASE_GmbH
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