Then more recently I did the Invenco journey, and sort of numbers-wise each of them is sort of like, let's call it 50 to hundreds of millions or zero to billions of dollars in enterprise value. So I think it gives me some credibility to talk about it. Certainly most of the sort of skills are reasonably relevant. I'm also the chair of a couple of startups, a little company called Vessev. You may have seen the boat flying around the harbor. Some of you might have had the chance to go on it. I've joined another one called Hiko, which is a power startup, and I'm also the executive chair of EROAD at the moment. So I've got a bit going on, but I think all of that stuff's relevant. It's sort of tech from New Zealand trying to export across the world. Yeah, the right way.
So we'll start with the safe harbor stuff. I've got to give you guys the appropriate amount of time to read it. I'm sure you've all read it before, but I'll give you 30 seconds. While you guys are reading that, I'll also point out the exits, and if there's a fire, follow me. I'll be first out the door. I think everyone's got that, right? Very good. So the agenda of the day, there's a bit going on here. Introduction to our current thinking, especially for the current investors. We've been talking about this a little while in our press releases, and we wanted to wrap a bow around it and talk to you. We've got a bunch of options in front of us. They're really exciting. We'll get the team to actually give you all the detail.
I'm just kind of the fluffer at the start, and then I'll come back and close off with some comments at the end. And we'll talk you through our business case and hopefully some Q&A, some good Q&A. So this is the start point, and so I'm kind of starting at the end, and this might be a bit confusing, but this is the punchline. So we're at a position now where we've got two futures in front of us. We've got a self-funded future where we continue on the sort of 10% trajectory that we're heading at, and you continue that path through the next four years, and we'll end up at about NZD 140 million with a pretty healthy EBITDA.
There's another option in front of us which we're really excited about, where we expand from our core cold drink and motor business into ice cream and food retail, and we go on one of these 25% CAGR growths, and 25% CAGR doesn't sound much to you back it up four years in a row, and then we end up at NZD 300+ million with a very, very healthy, and if you sort of did that story, you'd be in the NZX50. Now, the big disclaimer here that the most important part is we're under no pressure to take money. We're not asking for shareholder money, and that's the most important thing, so we start there. Don't panic. We know what we're doing, and off we go, so this is the same slide a different way, and it really starts to show.
You can see we're at in FY 2026. We're approaching the end of it, but you can see we're at this inflection point, and I feel like we have to come to our shareholder group and the wider community because the opportunity is just too good. And so the way we talk about this is Future One, which is our self-funded growth, where we just use the profits from the business, sort of set our EBITDA baseline, and we continue to grow responsibly. But every now and then you get these opportunities in your business where you see these kind of inflection points or paradigm shifts, and I feel like we're at that one now. And so here we are talking to you about with some funding we can go on a journey. So the people who are actually going to tell you about it is this team here.
I don't know if they're all here, but I'll go through them. We've got about 40 years of AoFrio experience. We've got Greg here, our CEO, who came in from Orion Health and has been at 3M. I think most of you guys know him. We've got Genevieve who's speaking. We've also got Howard, so that's the kids up the front with me. We've also got James here who's our Chief Revenue Officer. He's heading off to live in America for us next year and wave the flag. We've got Danny down the back who looks after environmental people and all of our other good stuff. Then there is Mark, who is our rock down the back. Mark's been with us forever, and he makes sure everything ships on time and makes it easy for us on the board. That's the team. It's really, really good.
I'm fortunate enough, like I did in my humble brag, to be enough across enough companies to know what good looks like. There's a really good team. We're really lucky to have them. You can see there's a little gap, and I guess that would be your bottom right corner. We do need more people. We need them in market, and so if we get the investment, that's where we would, right? There's obviously no coverage for APAC, no coverage for Europe, but my push is to get more of our management team into the market. But let's see if you believe the story at the end, and we'll have a talk about it. So here's the board. I'm obviously one member. The other member here today is Greg. There he is, put his hand up.
So I feel like the management probably don't think this, but I feel like you guys are pretty lucky to have us representing you. We've got all four corners here. We've got myself from a, I guess, a private equity background. Most of you guys know John Roberts, and he's from Capital Markets. Greg Allen, the old CEO, is now playing in the VC world. And we've got Ross, who sort of comes from an enterprise public like the likes of Trimble and Oracle. And then you've got Keith, who plays in all of them. So we've got all four corners of the compass. We've got startups through enterprise. I feel like we're pretty well represented. Again, we're one member short here, and we're sort of basing on depending on how this goes, which way we fill that position.
I feel like we're really well covered, and these people can take us to a pretty big number. So let's start to get into some numbers. Here's the start point. There's this sort of saying as a CEO, if you focus on your staff, your investors, or your customer, any one of them will bankrupt you. And so these are kind of my three points to kind of balance it out. So I don't know how much you guys or how aware of Net Promoter Score you are. It's a big-brain program. There's a whole book called The Ultimate Question. Essentially, that single question is the best forward indicator of future value in the job you do. And that number there, 62, it's the best I've seen in any company that's a B2B.
I've worked in some B2C companies where it's higher, but at a B2B level, 62 is a pretty wonderful number. If you turn up and do a good job, answer the phones, and deliver on time, you're normally at about 30, and if you start to delight people, which we clearly are, you get up into your 60s. You actually start to get to the point into your 70s where there's a danger of overservicing and spending too much money, but we're in a really good spot there. That staff engagement score at 72 is, again, that's world-class. Again, if you don't know that, we ask a whole bunch of questions. We use a tool called Culture Amp. It's not like, "Have you had a nice day, and do you like it?" It's like, "Do you have the tools? Are our products and services better?
Do you know what your job is?" There's about 60-70 questions. I think pretty much every Fortune 500 company used that, and again, I know that 72 from the other eight or nine companies that I can see is as good as it gets. Again, there's an element if it gets too high, you're not pushing hard enough. So I feel like it's a good number. And then when I took over as Chairman, the punchline was I think I spoke to about 80% of the shareholder base, at least by value, and I'm like, "What can I do?" And they're like, "Just hit your goddamn number." And so I think that was the polite version, actually. And we have. So we're 11 quarters in of hitting our number every time. I hope we're going to do it on the 12th one. I don't know if hope's a strategy.
We'll do it on the 12th one. And I feel like that's a credibility point. When we spoke to the shareholder group the first time, they're like, "Do it for two years, and then you've got the credibility there." So we've done it for 50% longer. So I feel like we're new at what we're doing. I might push something a little bit controversial out there. I feel like over the next 12 quarters, we may want to miss one or two by pushing a little bit harder because you know. But again, I told you it was controversial. But on to the next one. So this is the guidance that we've got at the moment, just to reset everybody. NZD 86 million up from NZD 79 million last year. Gross margin improvement, EBIT improvement. In fact, we're improving across every single metric that we measure. And so again, nothing new there.
And again, you can see we don't need the money. We can fund ourselves. We're comfortable. And so this is the story of the day. So the guys are going to fill out all this with color now. But the way I'm thinking about this, and there is a sort of artistic license here, but we're looking for about NZD 15 million, and we want to invest it across three categories and three segments. And so you can see there the way we talk about it is we've got our motors, our IoT, and our SaaS, and you can see we deliver them into the CDE business today. So that's the blue stuff. And then you can see we want to enter into the ice cream market, and we want to enter into the food market.
You can see that the blue lines is sort of it's a combination of our IP and our reach. While our motors and IoT can reach into the ice cream and food market, we certainly have no footprint. If you think about the NZD 15 million spend that we're sort of looking to do, which is on the orange, you can sort of very loosely think about it equally across product development and go-to-market activities, and you can also think it loosely spread equally across the three categories. That's my start point, and the guys are going to tell you all the detail now. With that, I'll hand over to Greg.
Thanks, John. Good morning, everyone. I'm Greg Balla. I'm the CEO of AoFrio, and it's great to be here to share our presentation with you today. As John mentioned, we feel that we're at a real inflection point for the business. It's not very often you get these opportunities where the market dynamics and the technology align to create this kind of unique opportunity. And so we're super excited about the fact that we have one of those opportunities, and this presentation is really talking to you about that particular aspect. A couple of examples of that, for example, one of our big brands, Coca-Cola, has said they want to put this type of technology in all their new-build equipment. So that's the first time they've kind of made that kind of statement.
And so when they're about a third of the market, if a third of the market says, "We want to do this," it doesn't mean it happens instantly or anything like that, but it's a good signal that there's this dynamic in the marketplace, this inflection point. The second thing that we're starting to see more from a technology perspective is companies like Heineken are saying, "Hey, we really value the data that you've got. Machine learning and AI are expanding the way we think about our business, and the opportunity to leverage the data that you're collecting is really amazing." And so we're seeing this technology and market dynamics really starting to cause this inflection. But who are we? So some of you may not have heard much about AoFrio, but we are the market leader for refrigeration fleet management in the cold drink equipment market.
Our customers today are the bottlers for brands like Coca-Cola, Pepsi, Heineken, ABI, and Ambev. So really big companies that we provide our solution to. But what does this mean? If you think about your corner store or your supermarket or convenience store, you see rows of refrigerators. And some of these refrigerators are branded: Coca-Cola, Pepsi, Heineken. And those branded coolers are not owned by the store or the convenience store. They're actually owned by the brand. And so they have tens of thousands of these or hundreds of thousands of these spread around their geography. And it's our technology that helps them manage these coolers. Those coolers are the primary sales tool for those particular brands. So they're really important for the brand, and to have them managed effectively to optimize their revenue and keep their cost structure right is what our technology does.
I'm going to talk to you a little bit more about the technology in a minute, but that's a really important part of the message. In this segment, there are three types of players that we talk about. We talk about the brands, so Coca-Cola, Pepsi, Heineken, then there's bottlers, so they're the people who actually have a license, if you like, to manufacture Coke, Pepsi, or Heineken for the brand. So there's a brand who has the ownership, and then bottlers who manufacture, distribute, and sell product. That's the second part, and the third part of the ecosystem, if you like, is the OEM, original equipment manufacturers, the people who make the refrigerators for the bottlers, so they're the three types of players you'll hear us talk about in this presentation, all have a really important role.
In terms of the market, the cold drink equipment market is a pretty well-defined market. It's about 29 million branded bottle coolers owned by Coke, Pepsi, and Heineken around the world, and there's two types shown on that chart in front of you. There's the black and red, which are the connected part of the market, so people that have got technology that allows those coolers to be connected and have information shared and managed. The opportunity for us is the 24 million that are unconnected, so there's a huge opportunity in this market. The black and red expand at roughly about 10% each year because that's about roughly what happens each year is these bottlers replace about 10% of their fleet and include this type of technology. So this change happens over time.
Today, for us, the share of our share of the market, those 3.5 million connected coolers, are mainly in Latin America. Why is that? That's because the Latin American businesses for Coke, Pepsi, and Heineken understood the value of this technology early. They were early adopters of technology. It does have something to do with the dynamics of their market and the cost structures and the things that they were trying to achieve. I'll talk more about that earlier. That 3.5 million that's up on the screen is primarily in Latin America, those 3.5 million connected coolers. As you can see from that, we have a pretty large share of the connected market today, which really positions us strongly going forward.
Those 3.5 million connected coolers, it's not so much that we have 3.5 million connected coolers, but we have 3.5 million coolers sharing data about the performance of Coke, Pepsi, and Heineken's primary sales tool. That's hugely important. We collect that data and provide it back to those bottlers to help them manage their businesses. Why do Coke, Pepsi, Heineken, etc., why do those bottlers want this information and these types of solutions? They have some real problems in the marketplace with their technology. They build these coolers built by an OEM, and they transfer them and put them somewhere. Actually, 6% of them are lost or stolen each year. If that's your primary sales tool, you're losing 6% of your revenue each year because you don't know where your coolers are. The next thing is around commercial performance.
It's well known that these coolers, if they're operating at the right temperature and in the right location, the sales revenue increases between 2% and 5% each year. So just ensuring that it's at the right temperature is hugely important. You might think that's pretty easy to do, but it's actually not. For an unconnected cooler, so the big part of that chart, they have a really simple technology in them. A lot of the technology is, for example, open to the storekeeper. So the storekeeper can go and adjust the dial. And storekeepers want to turn the temperature up because that's less energy consumption for them. So you have all of these kind of problems with trying to keep it at the right temperature. People leave the doors open.
And all of those kinds of challenges, just managing that cooler if you don't have the right type of technology in it. And so that increase, just by managing that, you get a revenue increase between 2% and 5%. And the types of technology we're talking about can help them do that. From a service and maintenance perspective, about 20% of every cooler gets a visit each year from a technician because there's a breakdown or some kind of fault with the cooler. A service visit costs between NZD 200 and NZD 800 per visit. These coolers are only worth about NZD 500. And if you have to do an NZD 800 service call, it's a pretty expensive call. Or even a NZD 200 call is a pretty expensive call. And that's not talking about the spare parts that they have to take. That's just the cost of the visit.
So the NZD 800 is in New York City. And just getting to the site and paying the parking and all the levies and things that you have to do to take your car into the city, it adds up very quickly. And so they're obviously really keen to minimize the number of service visits that are required to help them out here. The fourth area that our customers talk a lot about is energy consumption or sustainability. All our customers, Coke, Pepsi, Heineken, etc., have carbon footprint reduction targets. And these branded bottle coolers out in the field are about 35% of their carbon footprint. So if you've got carbon footprint reduction targets for your business, being able to reduce the energy consumption from these bottle coolers is a key part of you hitting your carbon footprint reduction objective.
We're going to have, in this presentation, three customer videos. I will say I hope your Spanish or Portuguese is really good because, as I said, all our main customers today are in Latin America, and Julio, who is our first presenter, is speaking in Portuguese. We did put English subtitles on the bottom just in case your Portuguese and Spanish wasn't quite up to it, but so that's why we have three Latin American speaking presentations because that is where our primary cold drink equipment business is today. As you can see, Julio is the connectivity manager. So he's the one who's responsible for ensuring that the types of technology that we provide is implemented and effective across his fleet. They're bottlers, so a Coca-Cola bottler in Brazil. So they're called Coca-Cola Andina, but they're a bottler.
They have a license to manufacture Coca-Cola, manufacture, distribute, and sell Coca-Cola in Brazil. There are five bottlers, Coca-Cola bottlers in Brazil, and Andina is one of those. They have a fleet of 120,000 coolers. It's a kind of a mid-size kind of fleet of coolers. But we'll now hear from Julio. Oops, no. Are you going to do the Julio?
Thank you.
Boa tarde, meu nome é Júlio. Sou encarregado de conectividade aqui da Andina. Vamos falar pouco sobre como a nossa parceria com a AoFrio impacta no nosso dia a dia aqui no nosso trabalho. Nos últimos anos, o setor de refrigeração comercial vem passando por uma transformação silenciosa, mas muito importante.
Antes, a nossa visibilidade dos equipamentos terminava no momento em que a gente os instalava no ponto de venda, o que deixava muita brecha para que a gente perdesse esses equipamentos, perdesse o controle sobre eles. Hoje, o nosso foco é claro: reduzir perdas e melhorar a gestão da frota. A conectividade transforma cada equipamento em uma fonte de dados, onde a gente consegue saber onde ele está, como está sendo usado e quando a gente precisa de atenção. Estamos desenvolvendo projetos de inteligência preditiva, utilizando dados de conectividade junto com dados comerciais. Com isso, a gente consegue criar score, score de crédito tanto para os clientes quanto para a área comercial. Isso nos dá a oportunidade de tomar decisões melhores sobre onde instalar os equipamentos e tomar decisões mais assertivas.
No momento das tecnologias que a AoFrio nos propõe, a que a gente mais tem utilizado é a da derrubada remota dos equipamentos, que nos ajudam muito a recuperar ativos que estão perdidos no mercado. Passada essa etapa, temos muito interesse em seguir com as novas tendências, como câmera embarcada nas geladeiras, equipamentos ao horizonte e com tecnologia 4G, que nos dá a visibilidade em tempo real de onde os nossos equipamentos estão e como eles estão sendo utilizados. Então, hoje, o nosso caminho é esse. Em parceria com a AoFrio, temos uma operação conectada, inteligente e sustentável, onde cada dado nos ajuda a proteger nossos ativos e a nossa operação.
Some of the key messages from Julio are that this type of technology is really helping them transform the performance of their business, being able to understand where their assets are, have targeted sales programs to optimize the performance of their coolers. These are really important things for them. We will talk about the type of return on investment they get from that in a minute. In fact, we will talk about it now. What we have got on the slide now is a typical bottler, which is about 150,000. Julio was 120,000, but we have given a use case of a bottler that has about 150,000 assets with an AoFrio solution. The type of solution they have got is a cellular connected solution. I will talk more about technology in a minute. Their basic software as AoFrio iQ. they have not got their advanced modules.
This is just a basic implementation of our solution. So in terms of this bottler, the first thing we talked about was asset loss. So if you reduce their asset loss from 6%, our type of technology can help them reduce that asset loss by up to 95%. And so that would save this customer NZD 3.6 million a year. But the other part of it is if you haven't lost the coolers, you actually have them generating revenue. And so the profit that they would make from that additional having those coolers in operation is another NZD 1.9 million a year. The reduced service visits, so with our technology, we can predict when a cooler is about to break down. And we can also, in some of the more advanced solutions, actually do some of the maintenance actions without sending anyone to the cooler.
We can also help them understand, is it just that someone has turned the power off or left the door open? You don't really need to send a technician out for those types of problems. Just being able to do that, we can significantly reduce the number of events that they need to go out to. We can also improve the effectiveness of it so they only go once rather than twice. Those kinds of things in this type of example would allow them to save about NZD 1 million a year. The energy efficiency we talk about in a slightly different way, and it's not actually included in this calculation because our customers, Coke, Pepsi, and Heineken, who own those refrigerators, don't actually pay for the energy being used at the store. It's the store owner who gets that benefit.
But our solution, combined with the right types of technology, can reduce their energy consumption in a cooler by up to 68%. A cooler typically will cost someone between NZD 200 and NZD 300 a year to run. So it is a significant portion of a store's energy. But obviously, it has a big reduction. This is their primary carbon footprint application. Being able to reduce the energy consumption significantly is hugely valuable to them, although we don't include it in the calculation. The sales boost, so the other part, the commercial part of the improvement, comes from making sure the temperature's right, the doors are open and closed at the right time, and they've got the right size cooler in the location. And that can help them generate additional revenue, and the profit from that revenue is indicated on the screen, the NZD 2.5 million.
The total annual benefit that this bottler would get from 150,000 coolers in the field is about NZD 9 million a year. Over the life of the cooler, that's a 5x return on their investment. That's really how we target any additional benefit that we try to deliver. We expect that we can help the cost-benefit analysis for the customers five times. You can see underneath that I've talked about some future technology where we believe we can add another NZD 7.5 million to that with some of our advanced technology. What are our products? Traditionally, if you had come to a meeting like this five years ago, you would have heard us talk a lot about motors. While they're still a really important part of our business today, in each one of these coolers, there are two motors. A single-door cooler.
And those motors are there to essentially help manage the temperature in the cooler itself. So they blow air around and those kinds of things in the back of the cooler. And there's two in each single-door cooler. Most of our motors actually don't go into these coolers anymore. They go into different types of coolers that you would see at your supermarket. But in these, they do have those two coolers, two motors. The smart part of a cooler is what we call the controller. And so this is the IoT device that you will hear us talk about. But what does this do? It actually manages all the different aspects of the cooler. There are many, many different setpoints in the cooler. For example, what temperature should it be at, when to turn the compressor on and off, when to turn the lights on and off.
All of these things. There's about 40 different things that the controller controls within a refrigerator. And it also is the primary data collection tool. So it's collecting data about the performance of that refrigerator. The next part of the technology solution is, well, if you've collected the data, you've got to communicate it to the cloud. And so we have this technology which is called a gateway. It's pretty much like a cell phone. It allows you to use Bluetooth connectivity to the controller, collect the data, and send it to the cloud via cellular communication, or send it to the AoFrio Cloud. I'll talk a bit more about the different types of technology in a minute, but this is basically how it works. And then the last part of the solution is the data management and cloud solution, which we call AoFrio iQ.
This is where we take the information from the controller via that gateway into our AoFrio iQ, and present the information back to our customers on the performance of their fleet. They get the performance information across those four areas: asset management, commercial performance, energy, and service and maintenance. So on the screen there, you can see one view, but there are multiple views depending on who you are. If you're the service and maintenance technician, you can get specific views tailored for you, which will tell you about the service and maintenance performance of that fleet of refrigerators. It gives you action lists, alerts, notifications, those types of things to help you do that. But to make that work, we run algorithms across hundreds and hundreds of millions of coolers to help us predict, to create those algorithms, to do those predictions.
That's the value that we have of having 3.5 million devices or units connected. We're able to run pretty sophisticated algorithms to do those types of predictions for service and maintenance or commercial performance and so on. Really important part of our overall solution. Just a slightly different view of the solution because this is kind of how it works. So down the bottom, we have the different types of hardware. You can see the AoFrio hardware kind of in the middle, which has got the controller, a camera, which is a soon-to-be-released bit of technology. We've got it out with a couple of trial customers at the moment. You can see the motors, the gateway, and a monitor. It's kind of similar to a controller, but you use it for a retrofit application.
But we also, as part of the offering to our customers, we offer to connect third-party hardware, so competitors' hardware. So if one of our customers has already got some connected controllers in their fleet that are not AoFrio's and they want one data source to help them manage their fleet, we offer to connect third-party technology to our cloud. And you can see an arrow pointing up in about the middle of the screen. That's indicating that we collect data from those refrigerators, send it into our data platform, do some really smart things with it, and then present it through our IQ visualization platform on the left-hand side. Our cloud is like many other clouds that you hear about. It's hosted in AWS. So it's standard global technology that we leverage to create our solution.
But we also have connections to our customers' cloud, and we send information both ways. So we send alerts and notifications about service and maintenance actions. And we also get information back that says, "Yes, you were correct," or, "No, you weren't correct." And so that helps us do some of that optimization. But the sharing of information between our cloud and the customer's cloud significantly, again, increases the value of the data because we can learn from them and they can learn from us. We also have connections into different types of technology. So if there's a ServiceNow platform, you may have heard, a service management platform, we can connect our data into a different type of other types of software technology to share information again. One of the really interesting things on this diagram is in September this year, we launched our first cellular technology.
You might hear us talk about SCS 800, but it's a cellular solution. What that allows us to do is have real-time data transmission from a cooler, and it allows us to communicate both ways, and Genevieve will talk a bit about remote management capability, so this type of technology allows people to do things from their desk that they used to have to go out into the field to do, so a really important step in terms of creating additional value to our customers, but why do we win? Why do we get those 62 plus 62 Net Promoter Scores? We have some real competitive advantage in the marketplace. We are the only complete integrated solution provider, so we provide hardware, software, data analytics, and great in-field customer support and engagement.
As you know, when you implement technology, it rarely works if you just install it and don't make any changes in your business. And we have teams in the field helping our customers implement this technology and get value out of it. We're the only ones in the marketplace who provide that in-field support. And that really sets us apart from our competitors. And that's why one of the big reasons we get that plus 62 type score. We're also known for our quality of our solution and the capability of our solution. The value that our customers can get from our solution far outweighs the value that they can get from competitor solutions. And you can see on the bottom right-hand side, that's the progressive journey that we've gone through in terms of getting to that 3.5 million connected devices.
Again, I'll say the importance of that is the amount and quantity of the data that we're able to collect. We now have another customer video. This is Fernando. He's from another bottler, a different bottler called Embonor. They're based in Chile. They have a fleet similar same size, about 110,000 coolers.
Nuestra estrategia es quitar a punta consolidar toda la información de los equipos de frío en un solo punto. Queremos integrar todas las marcas y todos los sistemas en una sola plataforma automatizada que nos permita gestionar nuestro día a día. Y desde la experiencia práctica, destacamos que los diagnósticos del portal AoFrio son muy precisos. El técnico llega, revisa y soluciona rápido.
Quizás el siguiente paso sea fortalecer la conectividad Bluetooth en conjunto con el modo always on y que funcione como un hub para todos los controladores cercanos y permita transmitir los datos sin interrupciones. Sabemos que existe, pero creo que falta trabajarlo aún más. En resumen, vamos en la dirección correcta en conjunto: más conectividad, más eficiencia y más inteligencia para la operación de frío. Y sin duda, con ustedes, AoFrio son un gran partner para todo este proceso.
So Fernando, I was a service and maintenance manager. So obviously, he was really looking at the service and maintenance of one of those pillars, the types of data that he could get to reduce the cost of service visits. So that's why, for him, this type of solution was really important.
John has already shared with you this slide, but this is really, I guess, a time to summarize our business, where we're at today. We're the market leader in this cold drink equipment segment. Our technology is recognized as being the best type of technology, end-to-end solution in this segment. We have a highly engaged team who are doing fantastic things to support our customers globally. I'm now just going to introduce our strategy, and then Genevieve is going to come up and take you through it. Our strategy is in three parts. The first part is protect and grow the core. That's really about the business that I've been talking to you about so far. It's about what are the opportunities that we have to grow in that cold drink equipment market and our motors and fan market, the traditional parts of our business.
Genevieve will then talk about the second part of our strategy, which is around diversification. And this is primarily about entering two new market segments: the ice cream segment and the food retail segment. We've chosen these segments carefully because we think it helps us from an organization in terms of the strategy of the organization, and they're really closely aligned to what we do today. The third part of our strategy is around transforming about the way we work as an organization. As we've changed from a hardware company to an IoT company to a hardware-enabled SaaS company leveraging machine learning and AI, you can't continue to remain the same. Your organization needs to change. Your go-to-market model has to change. The types of tools and technology and capabilities that you need in your organization change.
It's not good enough just to focus on the first two things. You've got to focus on making sure you've got the right capabilities, the right people, the right quantities of people to help you execute your strategy. And that's what that transform our foundations is about. It's really about ensuring that we have people, the right people, capable of doing their best work every day. And so it's a really important part of our strategy. So now I'll hand over to Genevieve.
All right. So as Greg's just outlined, our strategy is anchored in three core pillars: that protect and grow, diversify, and transform. And I'll start by talking about our protect and grow strategy for cold drink equipment.
So AoFrio's protect and grow strategy for cold drink equipment is all about defending and expanding our core business in that branded cold drink equipment by strengthening customer relationships, driving innovation, and increasing market share in both existing and new regions. If we start by defining the market, cold drink equipment refers to the specialized refrigeration units you see in convenience stores, supermarkets, and other retail outlets, typically branded by those major companies that we've talked about. That's your Coca-Cola, Pepsi, and Heineken. The coolers are owned by the beverage brands, not the stores. And so managing these fleets efficiently is critical for our customers as these assets are their primary sales tools in the field. AoFrio created the connected cooler market. We were the first to provide technology and services that help brand bottlers manage performance, reduce downtime, and optimize asset health across large dispersed fleets.
Our business model is built on deep long-term relationships with beverage bottlers and original equipment manufacturers. That's OEMs. Bottlers specify the components that go into their branded cold drink equipment, and these specifications drive OEM purchasing decisions. By partnering closely with bottlers, we demonstrate the operational and commercial value of our solutions, helping them optimize fleet performance, reduce downtime, and unlock data-driven insights. This influence ensures AoFrio's hardware and SaaS platform are embedded in OEM builds, creating a scalable model that combines upfront hardware sales with recurring SaaS revenue. In terms of market size for this segment, there are approximately 3 million new coolers built each year, and around 1.1 million of these are connected, which is where AoFrio's technology and solutions are applicable. By FY 2030, we expect there will be 2 million connected coolers built each year.
As the industry wakes up to the value of connected coolers, the operational impact, and the potential for AI-driven insights, we are ideally positioned to extend our leadership and capture even more of this growing market. Our cold drink equipment strategy focuses on reinforcing our leadership in connected refrigeration while expanding our serviceable available market, that's SAM, and our serviceable obtainable market, SOM, through innovation and regional growth. Today, we have a robust hardware portfolio, including that recently launched SCS 800 cellular controller. And alongside our existing Bluetooth refrigeration controllers, this gives us control for a broad range of coolers using Bluetooth or cellular data collection strategies. Currently, our solutions cover around 80% of our customers' new build fleet requirements. So in order to win the hardware land grab and achieve that full fleet coverage, we're expanding our hardware portfolio further.
That's with our SCS 100 and 150 controllers, which are affordable controllers that bring cellular and Bluetooth connectivity to smaller-sized coolers. We're also ensuring we have appropriate retrofit asset tracking options, and these are for older coolers with mechanical controllers so that our customers can track their entire fleet of coolers, as well as we're also trialing more advanced hardware solutions such as integrated cameras, which can generate insights that enhance a cooler's commercial performance. What this means is we can serve every segment of our customers' fleets, from the largest to the smallest assets, and we're aiming to grow our ecosystem of connected assets to around 9 million by 2030. We believe over this timeframe that we can increase our hardware revenue per cooler, which is around NZD 55 today to around NZD 115 in future.
And we see that shift being driven by two key changes. One is around the increasing demand from customers for cellular connected coolers, which means data collection and insights generation is much more timely and is no longer dependent on sales visits to the coolers. And then secondly, we see increasing adoption of cameras, and that's to enhance that commercial performance of the coolers. So in short, our growth will come from connecting more assets than ever before through a comprehensive range of hardware, from cellular controllers to cameras and asset trackers. We're positioning AoFrio as the go-to partner for intelligent connected refrigeration. Regionally, we'll protect our strong position in Latin America. This is through strategic pricing initiatives, ongoing trials of new solutions, and global account strategies, while also accelerating our entry into markets including the U.S., Europe, and Asia.
So in the graph on screen, we illustrate how our serviceable available market expands through product availability and market entry. The introduction of that cellular capability in our controllers means we now have access to the U.S. and European markets, where cellular connected coolers are a requirement due to the higher cost of labor in these regions. From a regional perspective, we currently have around 70% market share in our mature markets. And as we grow in our new regions, we expect to secure a further share of around 50% in the U.S., 45% in Europe, and 30% in APAC. So we talked about expanding the number of connected assets and also expanding regionally, but it's also important to talk about how we increase the value we deliver for every cooler in our customers' fleets. Today, our iQ SaaS platform is live, and we provide flexible options.
That's from data-only integrations to customers who have their own platforms all the way through to full-stack solutions, including software for those who want to use ours. The foundational solution provides core value by avoiding costly replacement of missing assets, knowing when service and maintenance is required, having the right information available to fix the cooler on the first visit, managing energy consumption, as well as providing commercial insights, ensuring coolers are restocked at appropriate times and drinks are sold at the right temperature. So currently, that foundational solution delivers around NZD 1-NZD 2 per cooler per year based on those core features. As a part of our strategy, we're also looking to introduce additional solution tiers for our customers. These will focus on remote asset management and camera-driven commercial insights.
So the next tier that we want to introduce, remote management, is all about remote control of coolers. And it'll allow customers to remotely disable coolers that are stolen or misused, to issue defrost protocols to coolers that are at risk of icing up, to predict maintenance issues before they occur, and to perform remote diagnostics or change parameter settings. This addresses one of the key challenges with a dispersed fleet: centralized remote control addressing specific challenges that may otherwise require someone to physically visit the cooler. The third tier, camera-driven commercial insights, will be used to address another key challenge. That's understanding and driving optimal retail practices at the point of sale. So this is about ensuring coolers are restocked regularly. In the photo on screen, you can see we've got a little bit of shelf space there. That represents lost revenue opportunity.
And if I go to the next image, we also want to detect what we call cooler purity issues. So if you've got a Coke cooler not with Coke product in it, again, you're going to be having some problems with your commercial performance. And then finally, planogram is really important as well. So a planogram is the sales team's layout, their plan for how the cooler should be stocked. It's how many facings of Coke, Diet Coke, 7Up should be in there, and it's designed to maximize the return, the revenue per cooler. And so with camera-driven insights, we can help with that retail execution and ensure that those coolers are stocked effectively. Just last week, the largest region of one of the world's largest beverage brands told us that unproductive coolers represent hundreds of millions of lost revenue impact.
And that's a problem that they believe solutions and technology like this can help to address. From a technology standpoint, we also see huge potential across our solutions deck to leverage AI and machine learning to support these kinds of use cases and more, such as leveraging data to better understand and predict consumer behavior as well. On the technology front, we've built and continue to expand on our strong AI foundations. We have edge processing in our controllers where it makes sense. We're preparing our APIs for M2M scenarios, and we're deploying machine learning models for predictive service and maintenance. So in terms of that commercial model, for the remote management tier, which will drive operational efficiency, reduce cooler downtime, and service costs, we expect to be able to charge an additional NZD 4 per cooler per year.
By layering in those high-value features around the camera-based insights for that planogram and stock management, as well as advanced AI-driven optimization, we see a clear path to delivering NZD 10-NZD 12 or more per cooler per year. As Greg touched on earlier, our ongoing aim is to ensure we're always delivering at least 5x ROI for our customers. These additional tiers represent a paradigm shift for AoFrio, from being simply part of our customer's infrastructure to a value driver of productivity and additional revenue. You can draw parallels of this type of tiered transition with companies like Invenco, who introduced advertising at the petrol pump as an additional commercial tier to their payment model, and they reached over 10 billion media impressions annually by taking that approach.
AoFrio's journey is all about transforming each cooler from a simple cold shelf into a smart, revenue-generating, and cost-saving node in our customers' operations, unlocking new value at every step and ensuring that as our customers' needs evolve, AoFrio's already always there ready to deliver more. We'll hear no from Dora Cárdenas, who is the commercial asset manager at Arca Continental, a bottler again and one of our largest customers, or our largest customer. They have a fleet of over one million coolers. They're a mature, innovative, long-standing customer of AoFrio who find our platform to be a key enabler of business value. Arca recognizes the impact of camera solutions and are currently running trials to determine their commercial impact.
Hola, los saluda Dora Cárdenas.
Soy jefe de activos comerciales en el corporativo de Arca Continental y además soy líder del proyecto de conectividad de coolers para nuestras operaciones en México, Ecuador, Argentina y Perú. Como compañía, tenemos más de 1 millón de equipos de frío en el mercado y desde hace más de 7 años una estrecha relación comercial con AoFrio. Sobre innovaciones para enfriadores, actualmente nos estamos enfocando en explorar el uso de cámaras, principalmente en casos de uso comerciales en dos líneas: uno que tiene que ver con ejecución, que se relaciona con nuestros KPIs de llenados, secos, respeto, y otra que tiene que ver con la optimización de planogramas y la venta perdida.
Aquí creemos que la plataforma es clave para enfocar nuestra atención hacia esas acciones que nos lleven al beneficio al negocio, pero también entendemos la necesidad de tener acceso a los datos de manera granular, porque más allá de este caso de negocio, tenemos algoritmos internos como el pedido sugerido y el potencial de ventas que se pueden enriquecer con este nivel de datos granulares.
Okay, thank you, Dora. So now on to our motor segment. This has been a foundational part of AoFrio's success and remains a key pillar of our protect and growth strategy. This business is built on our reputation for high-performance, energy-efficient, electronically commutated, or EC motors, primarily used in point-of-sale refrigerators, supermarket display cases, and now in new applications such as heat pump water heaters and agitators.
Our motors are valued for their efficiency, programmability, and reliability, delivering up to 50% lower operating costs compared to traditional alternatives and supporting advanced features like timed reverse and cooler disable. For FY 2025, the segment is forecast to deliver NZD 40 million in revenue with a gross margin of approximately 19%. Our goal is to grow revenue to NZD 70 million by 2030 through high-value applications, particularly as demand for energy efficiency and sustainability increases.
Our strategy for motors focuses on defending our leadership in EC motors for commercial refrigeration, driving operational efficiency and cost competitiveness, and expanding into new applications such as heat pump water heaters and agitators. In the graph to the right, you'll see the revenue bump in FY 2028 is a result of increasing adoption of electric heat pump water heaters due to US regulatory changes.
We also see untapped sales potential in our motors business. A targeted global sales approach will help us penetrate underdeveloped markets and customer segments. To support this, we're introducing new fan pack sizes and leveraging our strengths in performance, reliability, and energy efficiency. By protecting our core, expanding into those new applications, driving efficiency, and sharpening our global sales approach, we're confident we can unlock more value from this segment and accelerate growth. So this segment isn't only a stable cash generator for us.
It underpins our energy value proposition and provides strategic access to OEMs. Those OEMs also serve CDE and our diversified food retail and ice cream segments, which supports our broader ambitions. Now let's hear from Greg, who will provide a bit of a summary of our protect and growth strategy.
Thanks, Genevieve.
So you now have heard from Genevieve about the strategy we have for the protect and grow, which is the cold drink equipment and motors parts of our portfolio. The key parts of that were around connecting our customer's whole fleet, expanding into new markets, so the U.S., Europe, and APAC, increasing the dollars per cooler that we generate, and providing high-value solutions from a software perspective. So what that sums up at is when Genevieve spoke, she wasn't really differentiating between future one and future two. They were the same sorts of things that we will want to do in either of those futures. The graph on the right shows the difference that we expect from the future one and future two. So the current trajectory that we're on with the self-funded approach is the future one. With investment, we think we could accelerate this business.
What does that mean, though? The difference between future one and future two for this is really about going faster. It's about getting new products to market and capturing share earlier. It's about being able to deliver those higher-value solutions to our customers earlier. The higher-value solutions, of course, they pay more for them as well. So it's about bringing revenue forward. It's about taking opportunity that's there and going faster. It would also mean that we would increase sales and marketing effort in regions to drive the change from a technology perspective, but to support more customers adopting this type of technology. So that's the difference between future one and future two. Really exciting options. We're positive about both of those. Really good opportunities for growth in future one and future two. But we're really excited about the acceleration opportunity with some investment.
Genevieve's now going to start talking about the next two parts of our strategy. Diversify—what does that mean, and what does transform our foundations about? Back to Genevieve.
Okay, thank you, Greg. Our diversified strategy—it's about leveraging our proven capabilities to expand into adjacent market segments. That's specifically food retail and ice cream. This is a core element of that future two growth strategy. If we start by understanding food retail as a segment, it includes supermarkets, convenience stores, and micro markets. Organizations like Countdown, Carrefour, Walmart, OXXO—they operate large numbers of refrigerated assets across multiple outlets. The model here is outlet rather than fleet-focused. Each store or location is responsible for maintaining food safety, compliance, and operational efficiency across those outlets. In food retail, our solution delivers value through several key pillars. That's food safety.
Automated temperature monitoring and alerts to ensure products are always stored and served safely. Compliance, digital record keeping, and reporting to meet strict regulatory standards, and brand reputation. Protecting the retailer's image by reducing the risk of food safety incidents and ensuring consistent product quality for customers. Now, if we take a look at ice cream, this segment is actually quite similar to our core cold drink equipment segment. It has brands like Nestlé, Unilever, General Mills, and Froneri. They own and manage fleets of freezers that are placed, dispersed across retail outlets. We're back to a fleet model. The key difference here to cold drink equipment for our diversified opportunities is that heightened focus on product quality. These are perishable foods where real-time temperature data is critical to avoid losses and protect brand reputation.
They're often high-value products that have to be thrown out if a freezer fails, which can lead to thousands, tens of thousands of dollars of waste from a single incident, and I think some of you may have seen a headline this week relating to Countdown having an equipment failure that led to, I think, tens of thousands of dollars of product waste. In these sorts of incidents, there's sometimes even disagreement between the retailer and the brand who actually bears the cost of that type of failure as well, so having good tracking and monitoring of this becomes really essential. For ice cream, the value pillars are product quality, so that's monitoring temperature and conditions to ensure products remain at their best, but then we're back to some of the more familiar CDE pillars.
So asset management, knowing where those assets are and ensuring they're in the right place and working properly. Commercial performance is really important. So using technology to ensure that freezers are well stocked and adhere to planograms. And service and maintenance. So proactive monitoring and alerts to minimize downtime. And again, service and maintenance here is even more critical because the products within the freezer are perishable. We're already gaining some early traction in these markets, and we have pilots underway in supermarkets, convenience stores, and with some major brands, which I'll talk about now. Oh, actually, I'll talk about why diversify first. So why are we looking to diversify? So it's designed to improve the quality and resilience of our revenue. So while our cold drink equipment segment is capital expenditure-driven, we have an opportunity to approach this differently for food and ice cream.
That's increasing the proportion of recurring revenue and strengthening our financial predictability. So as I've just laid out, these segments present a compelling opportunity to solve high-value problems for our customers. And that's helping to address the 11% of food waste that can occur at the point of sale. In both food retail and ice cream, the goods I've already talked about them being perishable and of higher value. So that makes that operational performance and product integrity really critical. So unlike our core CDE segment, our cold drink segment, which began with a hardware-led model, we're entering these markets with a subscription-based solution from the outset. And that aligns with the growing acceptance of as-a-service models across global enterprises and supports our broader transition to a higher-margin software-led business model. We're aiming to increase our overall gross margin from 31% in 2025 to 37% by FY 2030.
That's largely driven by reaching software margins of 75% in our diversified segment. These markets are also very large. In food retail, we're targeting 13,000 outlets by FY 2030. That's a small portion of the 1.2 million outlets within medium to large chain supermarkets, convenience stores, and micro markets globally. In ice cream, we're aiming to have reached 420,000 connected freezers in our solution by FY 2030. And that's from a market total of 13 million freezers. So with targeted investment, we're confident we can leverage our proven momentum, our technical expertise, our global footprint, and scalable platform to deliver differentiated solutions and capture a modest but meaningful share in these underserved markets. This strategy is about quality growth, increasing ARR, improving our AoFrio software margins from approximately 22% today to up to 75% in future, and accessing those much larger addressable markets.
We see it as a strategic growth driver that positions our AoFrio for long-term success and value creation. So now we'll talk about some of our customers. So our food retail solution is the result of extensive learning from real-world pilots. We've worked with some well-known fast food, supermarket, and convenience store brands. We started by leveraging our proven technology from other markets, and then we adapted it based on what we learned. We used proof-of-concept trials across supermarkets and convenience stores in New Zealand, South America, and Asia to validate that technology. One, a supermarket pilot was focused on food safety. That's highlighted the need for tailored workflows supporting different roles within the supermarket ecosystem. We've developed web and mobile applications for food quality managers, site managers, and installers, making sure each user can access the right information and tools for their role.
Importantly, we have our first live customer in this segment. This is a New Zealand-based petrol station convenience store chain of 115 outlets with 1,200 assets connected. The pilot has converted into a three-year contract with a high proportion of recurring revenue. For this customer, we've started with a solution focused on managing energy consumption, a key concern for the organization. In future phases, we expect to address their needs in food quality and safety. In short, our food retail solution is shaped by real-world customer feedback and operational experience, not just assumptions. Every pilot's helped us refine our approach, ensuring we deliver measurable value and a user-friendly experience for every stakeholder. This is a little peek at our solution and the progress we've made.
The result is a solution tailored for food retail, delivering real-time temperature monitoring, compliance reporting, and instant alerts to help retailers ensure food safety, reduce waste, and meet regulatory requirements. The way it works is we have sensors installed within the customer's temperature-controlled spaces. These are places where perishable food is either stored or displayed for sale. Those sensors collect and send temperature information via a gateway to our cloud. This automatic recording enables customers to meet their compliance reporting objectives. Previously, they might have been reliant on staff going around with a clipboard, manually writing temperatures down several times throughout their shift, something that can be both error and fraud-prone and obviously high manual effort to complete as well. We actually have a customer who's purchased from us recently for this very reason.
Their insurance policy requires monitoring and reporting on temperature at two-hour intervals, which is very difficult to achieve with manual labor, but very easy for us to achieve with our solution, so next, once we have that temperature data flowing, we detect when that temperature-controlled zone goes out of range, and you might have different temperature ranges for different types of food. If a zone does go out of range, we alert the person on-site responsible, the site manager, and enable them to act quickly to preserve or dispose of the food as necessary and address the source of the issue. Finally, we provide oversight across all outlets to provide visibility of risk, performance, and to help customers prioritize the efforts where they may need to drive changes in practices and food safety culture within the organization.
This challenge is actually the problem that our supermarket chain pilot customer approached us with in the first instance. The first version of this solution is near completion and development. Many of our core web and mobile workflows for food quality managers, retail staff, and technicians are complete or nearly finished. That solution is easy to retrofit into existing refrigeration assets and is designed to scale across thousands of outlets. We're now very close to launch. Due to our close engagement with pilot customers, we're confident this solution meets the unique needs of our food retail customers. Let's talk about our strategy to win in food retail, so how we're leveraging our strengths and learnings to capture this high-potential market.
Our immediate priority is to complete that version one of our solution, which will provide a robust foundation for scaling and enable us to deliver the features our customers need most. Next, we're identifying additional pilot locations, which is essential for that ongoing validation of our solution, refining the value proposition, and ensuring we meet the diverse needs of food retail operators across different geographies as well as formats. We're also building a strong pipeline supported by a multi-region go-to-market strategy. This will require dedicated sales teams, technical presales, and subject matter experts in food retail. It's worth noting even before any formal go-to-market push, commercial momentum is already building. We have 15 opportunities in our pipeline today representing 38,000 outlets, which is actually well above our target of 13,000 outlets by FY 2030, and that just goes to show the size and potential of this market before we've even launched.
Next, we plan to develop a fit-for-market solution for ice cream. The solution will build on the strengths of our cold drink equipment and food retail solutions, creating a hybrid approach tailored to the unique needs of these segments. It will combine the proven cold drink equipment pillars of asset management, service and maintenance, energy efficiency, and commercial performance with those time-critical food safety capabilities developed for food retail. Because ice cream and frozen foods can't be refrozen, that real-time temperature control is non-negotiable, so the solution will prioritize real-time monitoring, instant alerts, and workflow-driven compliance to protect product quality and brand reputation and avoid stock loss. As these assets typically stock higher-value products, the commercial performance pillar takes on even greater importance, so supporting that effective retail execution, good freezer restocking practices, and understanding promotional effectiveness becomes even more important.
The solution will leverage our existing iQ SaaS platform and will be integrated with our hardware ecosystem: controllers, sensors, cellular gateways, plus optional camera technology for those advanced commercial insights. We will support both new build and retrofit scenarios for horizontal and vertical freezers, and that ensures scalability across diverse retail environments, so in short, our ice cream solution will deliver the best of both worlds: the operational excellence of cold drink equipment and the product quality and brand reputation of food retail with that strong focus on commercial performance. Shaping our solution thinking in ice cream are some strategic customers who we've been able to work with early due to the parallel needs with the cold drink equipment segment. One example I'd like to talk to you about is a major ice cream brand located in Chile, so they were our first pilot customer in ice cream.
Their challenge was asset loss and stock visibility across thousands of freezers. This opportunity came about because they had a hypothesis that the use of asset tracking technology could significantly reduce freezer theft. After two years, the results were so good, a reduction in freezer loss from 20% to just 0.5%, that they accelerated their plans to retrofit the remainder of their fleet. What was supposed to be an annual incremental project was reprioritized as an urgent fleet-wide retrofit initiative. For their fleet of 40,000 freezers, this benefit translates to a CapEx saving of $3.1 million per annum alone. That doesn't even account for the lost revenue from those lost coolers as well.
This customer has also shown strong interest in camera-enabled solutions for planogram compliance and stock visibility and again highlights the importance of that commercial performance value pillar in this segment. Insights from customers like these will shape version one of our ice cream solution, ensuring that it will be fit for purpose and ready to scale globally. Our strategy for this segment is all about building on what we already have, leveraging that proven hardware and SaaS platform while tailoring it to be product-market fit for ice cream and deliver that full fleet coverage. To do this, we'll develop new controller variants from our existing platforms. These will be optimized for freezer applications, ensuring connectivity and control across all asset types, large and small, new build and retrofit.
Learning from our cold drink equipment segment, we'll adapt and launch a camera-enabled solution for both new build and retrofit horizontal freezers, which will unlock those commercial insights. We'll AoFrio iQ solution for branded ice cream and frozen foods, and this will integrate those time-critical food safety and quality workflows with our existing pillars of asset management, service and maintenance, energy, and commercial performance, so our goal is to build product and pipeline for sales in FY 2027, and this will ensure we have a fit-for-purpose offering that meets the unique needs of the segment and positions our AoFrio as the leader in keeping frozen foods safe and ready to consume at the point of sale.
To sum up, our AoFrio's diversified strategy is all about quality growth, expanding beyond that core cold drink equipment segment into food retail and ice cream, where we can solve higher-value problems and unlock significant recurring revenue. We've validated our value proposition through pilots with leading brands, built a roadmap for fit-for-purpose solutions, and committed to launching offerings that combine our proven hardware, SaaS platform, and advanced features like camera-enabled insights and machine learning. From FY 2026 to FY 2030, this strategy will transform our AoFrio's revenue mix. We're targeting NZD 85 million in diversified revenue by FY 2030. And with the support of this diversified strategy, our overall ARR share will increase from 3% in FY 2025 to 19% by FY 2030. And that's driven by our high-margin ARR SaaS model for those diversified segments.
Diversification ensures resilience, scalability, and long-term shareholder value, positioning us as the leader in connected refrigeration across multiple segments and enabling us to capture meaningful share in these markets. And finally, the final strategic pillar is about transforming our foundations. So as our business has transitioned from being a hardware business to a hardware-enabled SaaS organization, we've required different skill sets, different business processes, and different systems to support our growth. And this is what this part of our strategy is all about. Our next phase is about deepening our transformation into a hardware-enabled data, SaaS, and AI organization, one that lives and breathes data, metrics, and AI. Building an adaptive, digitally enabled, and customer-centric organization remains the right foundation for sustained growth and competitive advantage.
Our strategic priorities include enhancing our go-to-market capabilities in line with new products and business models, becoming a data-driven, AI-powered organization delivering intelligent AI-centric solutions that enable innovation and measurable value, ongoing monitoring and improvement of our organization processes, structure, and skills to ensure we're well set up to deliver our strategy, maintaining and enhancing our EcoVadis certification, which is an important global sustainability rating that assesses companies' environmental, social, and governance. That's ESG performance, which is something our customers regularly ask us to report on. It's also about maintaining our supply chain resilience and ensuring our IT and cybersecurity practices and infrastructure stay ahead of the curve, mitigating risk and maintaining effective operations, so you've now heard AoFrio's growth plan built on those three pillars of protect and grow, diversify, and transform.
It's about building from our strong foundation of cold drink equipment and motors, diversifying into food retail and ice cream while continuing to adapt as an organization and build the right foundations for growth. We're really excited by this strategy and the two futures ahead of us, and I'll now hand over to Howard, who will take us through the numbers.
Thank you, Genevieve. I'm conscious of time, so I'm going to be quite fast, which is probably quite good. I've been CFO of AoFrio for 12 years, and I don't know where that time has gone. It's been pretty exciting and challenging. I'm going to briefly talk about recent performance and then, I guess, summarize the growth aspirations through to 2030. Before COVID came along, we were on a pretty good growth path.
I think we announced to the market that we intended to grow, and we set some targets, and that was in 2019. And in 2020, obviously, the world shut down. I think at one point, all of our customers were closed. So a very substantial decline in volumes in 2020, a very strong recovery in 2021, which led to most of our customers overstocking. So we then saw a decline in 2022. And in 2022, 2023, there was then the global electronic component shortages, which we believe was driven mostly by the automotive industry. So the impact on 2023 was reduced demand. We had to ration product to customers, but it also means it impacted a bit because our engineering team focused almost entirely on sustaining activities and re-engineering products for alternative components and not on development cycles. So 2020 to 2023 are broadly lumped together as COVID and unusual.
So we consider 2024 being the first normal year since pre-COVID. In 2024, we announced revenue growth of 19.7% and delivered NZD 2.5 million EBITDA. You've seen the slides for guidance. Further revenue growth in 2025 is expected and a NZD 1 million improvement in EBITDA to 3.5. So now looking at the future, so to orientate you, we've assisted all the way through this presentation. The blue shades at the bottom are the Future One self-funded strategy, delivering NZD 140 million at a 10% compound growth rate. And the orange shaded or yellow, I assume it's the same on the slide you can see, are the Future Two strategy. So that's the NZD 15 million investment to drive revenue growth at 25% compound and NZD 304 million total dollars. The chart shows segmentation.
In 2025, 47% of our revenue was from motors, 51% was from cold drink equipment, and 2% was early revenues from the diversification strategy. Talking about motors firstly, and I think it's been said earlier, very few of our motors now go into cold drink equipment. That market is met by Chinese product commoditized at lower price than ours. Our motors are in demand in the retail for retail display, where there's a value placed on performance, noise, low noise, and the IP rating, the water ingress rating. There's been recent success with motors into the hot water heat pump application, and we see real potential for that in 2028 as the U.S. market regulates higher standards. In 2026, we expect to be launching the wider range of fan packs, so that's a fan blade and motor assembly.
And we're also launching a long-shaft agitator motor for mixing applications, which is showing real potential. So there's real opportunity for us in motors. For CDE, as has been said, our success to date has been largely in Latin America with a Bluetooth application. The launch of the SCS 800 cellular product in 2026, I mean, we've officially announced it launched now, but it's still going through regulatory approvals, opens up to us, the U.S. and European markets, which were not open to us with a Bluetooth solution. So we've assumed a 50% market share for our cellular product in the USA, 45% in Europe, and 30% for APAC, bearing in mind that we enjoy 70% in Latin America today with our Bluetooth application. So you'd like to think we could get closer to our market share in Latin America and those other regions.
There is further product development in that sector. We're looking at a solution for smaller coolers, which is largely unconnected today. That will be launched in 2027, and we obviously expect some adoption of camera solutions in the cold drink equipment market AoFrio iQ, which is our SaaS offering, will be further development, adding further value to customers and therefore the opportunity to charge a higher price than is our current base price, so that's the core. Diversification can really only progress under the Future Two strategy with investment. Genevieve has just spent time taking you through the proposals for food retail and ice cream. We anticipate having a solution available for ice cream in FY 2027 with a 20% share of the available market, giv ing us NZD 50 million of revenue by FY 2030. Food retail is a retrofit solution rather than new build.
The hardware for it is likely to be purchased and not developed by us. We're targeting a 2.5% market share by FY 2030 with subscriptions based on the number of sensors supplied. SaaS or recurring revenue, we expect that in the CDE, the cold drinks equipment market, it'll continue to be a CapEx dominated market. Customers today buy hardware and between five and 10 years of platform access upfront. We expect that will continue. That seems to be the preferred choice for the beverage brands that we deal with. The diversification strategy opens up the opportunity for us to move into a monthly subscription model. That enables us to start lifting our SaaS revenue as a percentage of total. In our forecast through to FY 2030, SaaS revenue is around 19% of total revenue. Our targets are 50%. We're not there yet.
But you would expect the 19% to grow fairly rapidly in the out years as more and more of the customers' fleets are connected. I said I was going to go fast. To summarize then, in the Future One strategy, so Future One is our self-funded revenue at 140, gross margin at 34%, about 14 million Kiwi EBITDA. Rule of 40, so for those of you who are not familiar with the Rule of 40, it's a metric used in SaaS to assess companies' performance. The sum of annual revenue growth and the EBITDA margin percentage should equal or exceed 40%. Generally, over time, you'd expect the revenue portion of that to reduce because you can't continue to grow at massive rates and EBITDA percentage to increase. Under the Future Two scenario, we achieve that 40% Rule of 40. Under the self-funded model, we don't.
So that would suggest that there will be more work to do under the self-funded model to get to that Rule of 40 compliance. Revenue per head is at industry benchmark levels. That's where we set it and our assumptions around headcount. From my assessment, I think both options look attractive for our AoFrio. I'd love the Future Two scenario, but I'd be more than happy to back the Future One self-funded model. Thank you very much.
Can I ask a question? What's happened to the shareholders' idea of a strategist?
Can we take the question at the end, please?
They have a strongest reputation for creating shareholders.
I'll keep said at the end, okay? So if you give me 10 minutes, I'll wrap, and then we'll have a run-through. So that's actually a reasonable start. Over the years, trying to figure out how much I've probably raised, maybe NZD 5 million-NZD 800 million, quite a lot of money. So I feel like I know the right things to ask and take the responsibility pretty seriously. So again, only been here six years, so don't know all the things of the past, but I think we know what we're doing here. And if anyone wants to dig deep, you can see the detail that we have. So really, this is kind of like a, this is what we want to do, come and have a chat to us. So I'll just take you through how I think about it and try and wrap a bow around it.
I hope I represent the team well. There's 159 people of us here. They're really good at what they do. Like most companies would need to go and get consultants to put the sticks together. It's all done in-house. It's all done by us. I'm really proud of the work. So I showed you guys at the start, and I sort of hope it makes a bit more sense now. So again, there's a little bit of artistic license here, but if you think about the blue as our IP, and you could see in that model we were getting up to about NZD 600,000 per employee, that's the IP we're building. And really, it's based around CD and the three categories. Now, you can see we would like to move into the other segments, ice cream and food.
So again, I hope that helps you show that the blue is core, there's good money to be made, we know what we're doing. And then we see the opportunity. Now, this next slide is actually the same slide, but just in a graph form. And so I feel like a responsibility to you guys as the chairman or we as a board talk about it, you don't get these inflection points very often. So give you an example, GPS in 1999, 2000, if you were on that boat, it didn't matter what you were doing, as long as you turned up, it was a good ride. The Navman story is we went from NZD 50 million to NZD 500 million. You just had to be in the game. Saw it more recently, actually selling fish finders post-COVID. If you could make a fish finder that everyone wanted.
When the tide rides, you want to be on it. Again, I can see it right now at Digital Matter. There's this AI revolution going on, and I can tell you, if you're part of that, everything is good, and we certainly would like to be part of that, so we are at this point, and I feel like that's why we have an obligation to talk to you guys about the opportunity. Now, so I'm just going to dig into a couple of bits here and see if it's useful for you, so if you have a look at the three categories, which are the horizontals that I talk about, this is just in our CDE business. Now, I do take some liberties with the motor business because I realize that's wider than CDE.
But if you have a look at that, we're driving out costs, we've got new products. All of this will be online so you guys don't have to take photos, but I appreciate you liking my slide, and we've got to expand into new applications, so even in that motor business, we do have part of that is our future too, and you can see the orange there, so the one thing that I think everyone should be very happy with, our AoFrio is our land grab. We have 3 million connected fridges, well, 2.5 million now. That is no small undertaking. That's one of the biggest IoT networks in the world. It's got huge value. It's actually why I joined because I wanted to be part of it. I expect it's the largest IoT network any company in New Zealand has at least.
Again, when you see these next slides and you think about the land grab, we have got a proven track. Now, this time around, we'd like to make a little bit more money from the land grab, but we know how to grab the land. Then the final piece in here is you can see our SaaS. We get less than NZD 1 a cooler. One of the best slides out there was the ARR slide that Gen showed. I think it was, I actually wrote it down. Slide 30 if you guys are going back. But that's the money slide. You can see, I'll try and put this together here. This is what's happening in our cold drink equipment. This is majority of the blue, but there is some of the Future Two in here.
You can see, look at our share of wallet, which is those red bars. It's very, very strong in LatAm. LatAm is the world leader in connected fridges. You can see, we could just ride that tide and that would be the blue. I really want to get into the rest of the world. It's quite a big place. You can see that all of those other markets are starting to develop. We don't need to do a lot there in terms of the product front. That is really go-to-market investments. When you try and get to the really or the margin, you need to invest a little bit more in the software.
So on that slide, which is all represented in our numbers, let's say 80% of it is Future One, and then you've got 20% Future Two, which is the gross margin, which is actually cream, right? The hard bit's getting the customer, and then the next bit is farming them. So I think this is, I would say this is an underlying reason in the base case and the whole thing. I know it's some pretty simple math, but if you translate what's going on in our pitch here, it's that we're going from 3 million connected fridges to 9 million connected fridges. And you go, geez, that's a lot of fridges. Yes, it is, but it's actually just us maintaining our market share as this market expands. And this is what I talk about, the tide riding. This is the one you want to be a part of.
The other one is the ARR increasing. So again, that's back to Gen's slide on 30. With things like the cameras and defrost and intelligence and platform metrics and all the environmental things we can bring, that increase in the revenue is probably more than that in the outer years, but in the next four years, let's call it NZD 1-NZD 3. And so the math there, you can see, you go from NZD 3 million in ARR to NZD 27 million. That one little piece of business in this greater picture is actually, well, at any market valuation today, it's worth more than the company is today, just to give you a scale of what we're dealing with. Now, the other two things that are going on are the ice cream and the food market.
So again, this one, you can see our share of wallet is pretty small, and you can see the size of the potential market. Jen talked about it. In this model and what we've modeled, we're only modeling 13,000 sites. I think she mentioned that we had 38,000 sites across eight customers. If you go to our wider CRM pipe, it's actually 15 customers. If we put anything more than that, you would actually think we'd lost our minds. Even still, we're showing a hockey stick that actually borderlines credibility. The challenge here is we're a public company, which is our core CDE. We could start to appeal to a private equity market in our ice cream because it's a natural transition. Then we've got a VC market, which is this food market totally exploding.
So there's a lot going on here, which is why it's quite a big story. But again, all these numbers ground up, there's nothing top down. One of the best slides, or actually, there's two wonderful slides. One is page 14 and one 17. We understand the customer pain. Clearly, our customers talk about it. If it's not pain, we understand the customer benefits we offer. Everything that we talk about, we can then return an investment or a return on investment for those. The minimum we look for is 5x . So we gave the example there where the return to Coke, Pepsi, Heineken was five times, and that's before you take the environmental savings for the owner. So it's a wonderful proposition for our customers.
Again, just trying to help give you guys some frameworks or some ways to think about this, of the McKinsey framework on this one. They talk about the three horizons. We're obviously building from our core IP, and that's both the product and our market placement in CDE, and we're expanding into ice cream and food. Now, the deceptive thing about this is the ice cream opportunity actually has more product work, but our brand reputation pulls it. It's a market that we understand. It's a very similar model. The food one, because we've been talking about these trials that we've been doing for the last couple of years and all our press releases have gone extremely well, and we're getting pulled in.
So there's this kind of element of we are actually getting pulled, which is why, again, we feel the obligation to raise the money. It's not us, yeah, I'd almost say it's not us selling because we're not spending that much on selling. We're actually getting pulled. But you can see the ice cream leverages our brand. It leverages our footprint. It fills out our SaaS offering. There's something very exciting there that's a land grab. And I don't believe that'll be there because the benefits to the customers are so great. Someone's going to fill it. And in this world where data as a service is sort of like the last competitive advantage, whoever wins that over the next couple of years will have the same advantage that we have in the cooler drink equipment. We have three million, 3.5 million.
The next biggest person in our space has less than, let's call it 2% of our footprint, and really, when data is the game and you've got the footprint, it's very hard for people to get in, so again, that one's pretty easy to understand. The food one, again, there is no established leader. There is no brand who owns this space, but quite obviously, with the advent of AI and sort of single pane of glass and all of that stuff, this will go, and in our model, it gets a reasonable portion of our sales, but actually, if you go beyond 2030, this will take us for another decade and sort of the future of the company. Now, so talked about it, tried to put it in graphs, and so I've tried to use our blue yellow.
And what I'm trying to show here is in both categories and segments. Again, you can see that there's growth. And there's healthy growth in both the Future One and Future Two scenario. The one that I'd like to finish on, this is how I would like to talk about the business and future, assuming everyone supports us. Our CDE and motors business, again, you see that grow. You see our ice cream business start to layer on top. Again, it's more immediate revenue because it's that traditional high hardware. And then obviously, the food starts to ramp. Again, if you go to the outer years, actually, it starts to get crazy where the food takes over everything. But again, for the purposes of today, you can see the model.
But again, you can have a look at by our categories and you can see that our IoT hardware or that hardware land grab that we want to go on is the core driver. And again, you've got that little red bit at the top of 2030, which is about NZD 50-odd million of SaaS. And again, if we get that, we're talking a valuation that dwarfs the size of the company today and will make all of our shareholders very happy. So that's my wrap. Again, big shout out. Where are you, Adam?
Thank you, man. It's great to have all that work done. I didn't spot Rami there before. So Rami has to design all this stuff for us. So big shiny head, big brain in there. So if you guys want to talk to any of the team afterwards, welcome it.
It's a real honor to be able to represent everyone, and thank you for your time. Now, we'll do some Q&A, I guess, if you guys are up for that. If you do ask a question, can you please grab a mic? Otherwise, the people online won't hear the question. Do you want to come and stand in the firing line with me? That'd be fun. Does anyone have any questions?
Yeah. What's going on for the shareholders in the immediate future? We've been sitting here patiently waiting for about the last five years for something to happen. The share price has been going sideways. I mean, it went down to NZD 0.07. I think it might be up to NZD 0.10. I think it's NZD 0.10 today. NZD 0.10 today, if you're lucky. It's been up to NZD 0.25 in the past. What are you doing to boost the share price?
Well, I figured that was the presentation.
Very technical, very much like you'd see at Rakon. They don't look after their shareholders either. So what are you going to do to look after your shareholders?
I don't think I can comment on Rakon, but I actually don't know if I said any technical words. Obviously, what we do is technical, so we have to explain it. But again, our job is to run the business as best we can. And I believe we're running it as best as we can.
Yeah, but you said that you were representing the shareholders on the board. So what are you doing to boost things for the shareholders?
So the game is we run the company as well as we can, and then the market responds. I'm a shareholder, quite a significant one, so is most of the team.
So I have the same sentiment as you, but I know I'll get in real trouble if I say too much. So I share the same sentiment. I can tell you some of our other board members have very significant holdings. But the game is you do the right thing and eventually the market will recognize it. And so our job is just to keep doing the right thing and the market will recognize it.
Hi, it's Brian Farley. Currently, your major customers are Coca-Cola and things like that. So if you're going into the food market and ice cream, you're going to have to deal with individual shop owners. So how are you doing that?
Yeah, so I'll just talk about those two different segments quickly. The ice cream market is very similar in structure to the cold drink equipment market. So it's dealing with big brands, Nestlé, etc.
So it's the same kind of structure. So we won't be dealing with individual shop owners for that. For the food retail market, we're targeting chains. So we're dealing with big companies that own 100 or more chains, 100 or more stores. We're not targeting in the first round individual stores or individual shop owners. It's brands that have hundreds and hundreds of stores. One of the ones that's in our pipeline actually has 13,000 outlets. So these are big organizations that have multiple locations. So it aligns with the type of models that we're used to. Come over there,
Danny. Hi, yeah. I'm just interested in the expansion to U.S. and Europe. What indications are there that that's going to be receptive? They're also slow in the numbers of connected units. So what's going to make them change there?
I think there's quite a few changes that are happening from a marketplace perspective. The cost of data transmission is coming down, and so the value of the solution goes up. So that's one of the things that's driving it, but how this market has developed more generally is with organizations like us talking about the benefit of the solution across these customers. It's not hundreds and hundreds and hundreds of customers, so we can talk pretty successfully across all the customers in all of these locations, and so we, plus others, are driving this, but our customers, if you take Heineken, for example, there's Heineken in Latin America, and they go, "Heineken in Latin America? Oh, they're getting really good results. Well, why can't we get those results in Heineken in Europe?" So they're learning from each other, if you like, so this momentum is building.
But it's also technology change that is enabling Europe. They have a slightly different business models. The cost of labor is high. So the Bluetooth solution that was really successful in Latin America just doesn't work for that region. And so the changes in technology are enabling them now to adopt the technology. We're really positive about it. We've got lots of work going on. We have pilot work with Pepsi in the U.S., pilots going on with Pepsi in Europe. We're talking to Heineken Global. We're talking to ABI Global. So we have all of these customers talking to us in the CDE space. And we're well down the track with running pilots and solutions across U.S. and Europe and more globally.
Thank you.
I'll just pitch in with so I was fortunate enough to be up in Seattle the other week drinking the Kool-Aid from some of the big brands up there and literally we talk about AI or data as a service as a concept. It's real and it's going. Again, I'm fortunate enough with another company called Digital Matter, which is an IoT connected hardware business. I can tell you it's real and so you may say the U.S. is slow to adopt, but it doesn't feel very slow when I'm up there. I would say we are way, way behind. The point in that is this AI revolution. It's so real. One of my hustles, we've got 10 kids coming, 10 19-year-old graduates. All of them are writing applications for our staff.
And so all of a sudden, software as a service used to be a big thing that was hard to access and slow. Now you can get, yeah, 10 kids in for a summer and they can actually light up your supply chain or do things. And so it's so accessible now. I feel like, again, that's that inflection point I'm talking about. Vibe Coding didn't exist a year ago as a term, and yet everybody and every single one of my companies is using it every day now. And so, yeah, it's turned.
Hi there. Sorry, just a quick question. I think you said NZD 15 million you needed for Future Two. Is that what we said?
Yeah.
Okay. And where is that money coming from? Is it coming from a debt facility or are you going to raise it or?
Well, that's what the point of this is.
So, we're investigating all options, and we won't be taking it off our shareholders, and we won't be taking it for a lower to capital value, and we don't have to take it. And so, this is the discussion that we have to have with people. If you believe and you want to be part of it, let's go. And if you don't, there's no downside for you. We're still looking after you.
Okay. Thank you.
Could that include a cash issue possibly to shareholders? You could include a cash issue to shareholders to raise the money?
No, no. It's very clear that our shareholders have been through, well, before me, and we've got one of them over here, have been through a rough old ride. There's no appetite from our shareholders to go up.
We wouldn't do it to them because we know if we said that our share price would drop and they'd be even angrier.
Well, it's interesting you say that because I've been a shareholder for 20 or 30 years or whatever. And ever since Greg came on board, actually, I've seen the promise and the change. I think everything you say is very exciting. I've noticed. I've looked at the report. I've looked at the people. I think it's a huge future. I'm very much keen to be part of it. And well, you may be right. The rest of the shareholders feel like this man over here, but I'm on an entirely different view. So yeah, you're probably correct.
I'm a shareholder too, and I want to have a real go at this. Yeah.
I think the staff want to have a go at it. There's this kind of thing when you've got a really great team like we have. If we don't have a red hot go at it, we actually may lose some of the supreme talent we have because we're not going hard enough. There's a lot going on here.
I think it would be great to include the staff in it as much as you can.
We will do our very best.
Thank you.
Rob Morrison, Craigs. Thank you for the presentation, guys. Really enjoyed it. You talked about your refrigeration product in Latin America, and you gave five benefits. What's the number one benefit that customers told you about?
I'll talk about it slightly differently. The first use case that people asked us about was, can you actually tell us where our refrigerators are?
So that was the first thing. So the asset loss was the original use case. But the real money is in commercial performance. Can you lift the revenue performance of the refrigerator? That's where the real benefit is. So you have two parts of the benefit. It's the operational benefit. Can you tell me where it is? Is it performing effectively? And then you have the revenue-generating parts, which is, can you lift the performance of this asset to sell more product? And obviously, sales is what motivates most of these companies. So that's where the big interest is, is in the commercial performance.
Got it. And is the theft a bit higher maybe in Latin America, and that's why you're over-penetrated there?
Sorry, I didn't quite get that.
So the issue of the refrigerators going missing, is that maybe a bit more of an issue in Latin America?
Yeah, definitely. That's a bigger issue in Latin America. Although I'll give you a story if you like. We had one of our sales reps go on a trip through Europe with a brand that I won't mention. And they went to every location they thought a cooler was at, and there was not one out of the whole day that was a cooler where they thought it was. So we say it's not an issue in Europe, but for this one brand, not one of their coolers was where they thought it was.
Thank you.
Yeah, I want to have a swing at that too. It's a good question. So if you think about what we're doing and you go, it was slide 14 of our different customer pain points, right? That's why it's so wonderful.
And so, if you think about if you use a MEDDIC or a BANT on these modern sales processes, they go, "Who's the economic buyer?" And so you find out who in the P&L you get to, and you go, the operations people don't typically have a lot of money, and that's what was Greg at that. But you can see with our new offerings, like the camera, we all of a sudden start to get into the money part of the supply chain or the money part of the P&L, which is the sales and marketing. And those people have lots more money to spend because the return on their money is so great. And so at the moment, you can see at 30% gross margin, we're constrained because we're selling efficiencies and yada yada.
But if we can get to the other part of the supply chain, which is the sales and marketing, their return is greater. Therefore, they have more money. And so there's a really, really it's a gross margin uplift story that's going on behind the scenes. But because we have five or six stories and the returns are so great, we actually have this unique ability to go into a company and sell the whole way through the P&L. We can sell to the sales team, to the marketing team, to the operations team, to the service team, to the CFO. So it's really quite a unique proposition. Normally, when you're selling a company, you're like, there's a small narrow band that you're pitching to, but we've got a really complete offering here. All right, kids, that was great. Thank you for having us.
We'll have some food and some drinks. Welcome any questions, and again, thank you guys for your time. I hope you like what you had to see. Thank you.