Coming from the private equity industry, we assume Neonode’s main owners have high standards. Consequently, we expect them to be disappointed with the lack of closed deals. However, we do not read in any drama or structural market changes pulling the rug out from under Neonode’s feet. Moreover, at this point, we do not see any major internal mistakes, similar to the ones around year 2015-2016, that would provoke or require a change. The change seems more driven by Neonode having found the perfect CEO candidate. No reflection on Håkan Persson. Persson leaves a legacy of a structured sales process and a more focused pipeline.
What makes Urban Forssell a good choice?
As automotive, in our opinion, is the most important market opportunity for Neonode we like the fact that Urban Forssell has spent his entire career in the automotive industry. However, this should not be read as a sign of increased automotive focus, but rather something that will improve the accuracy in winning auto business, according to COB, Ulf Rosberg.
We believe Forssell has a strong and highly relevant track record. NIRA Dynamics was founded in 2001 with Urban Forssell as its CEO during the first nine years up until 2009. In 2004, around the time when it became known that tire pressure monitoring would be required by law, Audi acquired NIRA Dynamics. We believe Forssell was key in laying the foundation of NIRA Dynamics’ majority market share in software-based tire pressure monitoring. NIRA Dynamics has grown from SEK 42m in sales and an 8% EBIT margin in 2009 to SEK 284m and 39% in 2018. Given the generally long lead times in automotive, it is our belief that Forssell was instrumental in the NIRA Dynamics success story.
Following NIRA Dynamics, Forssell has served almost nine years at Öhlins Racing, another impressive automotive growth story. During Forssell’s tenure (2011-2018), net sales almost doubled from SEK 590m to over SEK 1.1 bn. Forssell has held various VP positions at Öhlins since 2013. Most notably, he was VP of the important business area CES (electronically controlled suspension technologies), which we believe accounts for a substantial part of Öhlins’s total sales.
What’s in it for Forssell?
We believe assuming the CEO position of Neonode is a step down in Forssell’s career, compared to his current work at the Fortune 200 company Tenneco (sales of USD 12 bn) that recently acquired Öhlins. Looking at Forssell’s deep technical competency (Ph.D. in automatic control and VP of RD&E), a high-tech company like Neonode seems like a good fit. We believe Neonode to Forssell is a chance to build a new success story like NIRA Dynamics, but this time he does not need to do it from scratch as Neonode already has an auto business with existing products for eight OEMs and a dozen of tier-1 partners. Thus, the big breakthrough might not take seven years this time.
By clicking "Sign up" you indicate that you read and agree to our Terms & ConditionsI already have an account and want to sign in