Atol Avion Oy
ATOL Avion is producing and commercializing the latest version of LSA aircrafts from the heart of Lapland to clients worldwide.
|Company name||Atol Avion Oy|
|Entrepreneur||Markku Koivurova and Anssi Rekula|
|Investment range||100.000 – 300.000 €|
|Equity offered||3.13 – 8.82 %|
|Price per share||200,00 €|
|Number of existing shares||15,500|
|End date||7.6.2015 23:59|
|Field of business||Manufacturing|
Rovaniemi, Lapland: the land of reindeers and British tourists looking for the closest Santa. Northern Finland is surely a place that catches the imagination of many locals and tourists with its scenery.
But Lapland is also the land of sisu, of proud workers making high quality innovative products ready to expand internationally. Lapland is where Atol Avion was born in 2012 and where the company has created a top quality LSA-class amphibious plane that is ready to challenge international incumbents.
Atol Avion Oy produces, develops and commercializes aviation equipment. The ATOL amphibious aircraft is our main product but the company is also planning to produce diesel engines that can be installed in regular airplanes. For the future, the team is also envisioning to introduce a four-seater version of the ATOL plane. Our vision is to become the highest quality Light Sport Aircraft (LSA) amphibian manufacturer in the world. We aim at producing more than a thousand ATOL LSA aircrafts for national and international markets.
We aim to become the most desirable employer in the aviation sector in Finland. Most of all, we want to create value for our shareholders, generate a good return on investment, and give shareholders an opportunity to be involved in realizing one of the man’s biggest dreams: to fly from place to place independently, without schedules and airports.
Our business & market situation
ATOL 650 LSA: Atol’s answer to the LSA markets
ATOL LSA is a type of amphibious aircraft, which can land on and take off from water. The absence of floats results in less air resistance, weight and a higher center of gravity for the plane. The frame itself acts as a float, as in boats, allowing safe operating from water and making it difficult to roll over when landing or taxiing on water. The plane has a retractable landing gear which can also be equipped with skis. In short, the ATOL LSA can operate on land, water and snow and only needs few hundred meters for take-off and landing.
The plane is built out of wood composite specifically developed for the plane. The wood composite is a strong but lightweight and ecological raw material. The plane also uses the latest Rotax 912iS engine, one of the safest and most economically efficient models on the market.
The ATOL LSA was born from the ATOL UL concept, a model previously developed by the entrepreneurs. ATOL UL is an ultralight-class experimental aircraft still in in use after over 20 years of activity. The quality of the ATOL UL design solution and the experience gained by the team in its development has created the basis for the LSA version, where all technology has been modernized, the size of the plane has been increased, and the plane has been fitted with several solutions that make the plane easier to use.
Sport aviation is an industry under strong pressure to reduce costs. The standard cost of the fuel of a general aviation aircraft is about 100 €/flight hour. Landing facilities are also additional costs, especially in metropolitan areas.
LSA Aircraft: a rising star in the industry
Amphibious aircrafts can be the answer to the above-mentioned problems in the industry. Amphibious aircrafts do not need an airport for take-off or landing, however, their technical development has been almost stationary for a long time. LSA (Light Sport Aircraft), ultra-light machines, have developed into a whole new category. LSAs allow for more loading and maximum take-off mass of 650Kg. The frame is manufactured to safely load two passengers, luggage, and a sufficient amount of fuel. The LSA planes use modern four-stroke engines that allow the aircraft to use normal car gasoline instead of expensive plane fuel. The engine’s maintenance costs are also significantly lower.
Moreover, the certificate for LSA approval is substantially cheaper than the traditional certificates for general aviation, which has a direct impact on the cost structure of the company allowing for a more agile development process.
The LSA market is still small but has been developing quickly in the latest years. The LSA segment is one of the best performing segments in the aircraft industry and we believe it has the potential to support our company in a solid international expansion plan.
Finpro’s market research (23/05/2014 – full document attached below) has indicated the US as the main market for LSAs with China, Brazil, Russia and EU as possible future growth targets. The sales trends are strictly linked to the economic cycle, therefore it is not possible to have exact estimates about the size at this stage. The market, however, is evolving quickly and a fast expansion to become an established player within one to two years is recommended.
Our competitor Icon’s order backlog of 1200 planes gives a good idea of the market potential. It is therefore possible for us to reach for up to 50 planes out of the hundreds of planes sold yearly.
Our business model:
ATOL LSAs are sold ex-ante with the following payment schedule from the customer:
- 30% paid when the construction starts
- 40% paid when the plane is ready
- 30% paid upon delivery
The above arrangement enables an agile management of the working capital with the construction of the aircraft not affecting the company’s assets.
The production takes place in Rovaniemi, Finland using the best suppliers and best components in the industry.
Atol Avion will present its products at international trade fairs and via Internet and social media. In line with the sales philosophy of the company the team will attend two fairs in the short-medium term to increase visibility and trigger sales:
- AERO 2015 (April 2015) in Germany
- Oshkosh Airventure Fair 2016 in the US
The ATOL 650 LSA concept is complete and already in production. The entrepreneurs have accumulated much experience of ATOL planes, amphibious planes in general, design and production of various prototypes, and of aviation in general.
The production site in Rovaniemi can count on the best experts and the facilities belonging to Atol Avion’s mother.
We believe the market is now ready for further expansion; we have set a pricing strategy and are receiving frequent inquiries about our planes from all over the world. We already have 5 orders, one of which is from the US. The emergence of new players within the amphibious aircraft industry is helping to grow the market. Although difficult to grasp due to macroeconomics conditions, interest towards amphibious planes is growing and we believe the growth to continue at sustainable rates.
We are planning to introduce two new products later on: a four-seater amphibious plane and a retrofit kit for a diesel engine intended for small aircraft. Both products have large global markets.
Atol Avion Oy has 10 committed shareholders with relevant experience in the manufacturing, R&D and commercialization of products in the aviation industry.
Five key team members take care of the operations at this stage to assure lean production and sales processes.
Entrepreneur, CEO, technical manager, chief designer of the Atol plane
Markku is the designer of ATOL and the head of production at our Rovaniemi factory. He also designed and manufactured earlier ATOLs and has been involved in numerous other technical projects before returning back to his most beloved project. He became an entrepreneur in 1986.
Co-Founder, marketing and sales manager
Anssi is a co-founder of Atol Avion. He has been working as a fully licenced maintenance and flight engineer at the Finnish Border Guard with SAR helicopters before starting his flight career at Finnair in 1990.
Ari has made a career as a fighter pilot (Draken) in Rovaniemi, followed by working for Blue1 as a commercial pilot.
Ari has a long career in commercial piloting for Finnair. Today he is using his skills for hobby flying.
Work management and preparation of prototypes
Kari is a former watchmaker that wanted to re-educate himself. His choice of educational field was obvious, since he had a background in sports flying. His experience in precision mechanics has turned out to be crucial for Atol.
Tony is a flight mechanic, with a 10-year long versatile experience from airplane and helicopter maintenance and repair.
Advisor and head of test flights
Timo Toikka is ATOL Avion’s advisor and head of test flights. He is in charge of all flight trainings. Timo has worked as a commercial flight pilot in Finland and around Europe. Plane types he has been flying: King Air 90-200, Beechjet 400, Citation X, Citation Excel, Challenger 350, Single engine land and sea CRI/CRE IRI/IRE TRI/TRE
Uses of funds
Capital expenditure plan
Q3 2015 (use of 20% of the capital raised):
The capital raised will be used to produce molds and further tools to sustain higher production rates.
Q4 2015 (use of 20% of the capital raised):
The company will obtain EASA’s DOA (Design Organization Approval) and POA (Production Organization Approval) certificates, which are required in the production of LSA aircraft in Europe. FAA approval has also been applied for.
Q1 2016 (use of 40% of the capital raised):
The goal of the first quarter of 2016 will be to scale the production in terms of units to boost sales and increase the client base.
Q2 2016 (use of 20% of the capital raised):
The remaining 20% of the capital will be employed for marketing, sales and product development.
About the investment
Overall we believe Atol Avion Oy is an interesting investment opportunity with the potential for a good return on investment. You can be directly involved in Finnish aviation history by becoming a partner in the fourth aircraft factory of independent Finland.
The company’s total number of current shares is 15,500. There are 109 outstanding options that have been distributed between the existing shareholders. 446 new shares have been issued to new investors prior to opening the round on Invesdor.
The articles of association of the company include a redemption clause.
The share price is 200 Euro, of which 50 Euro will be allocated to share capital and 150 Euro to the reserve for invested non-restricted capital (SVOP).
Plans for future funding
A successful round together with a fair amount of product sales should provide us a safe runway in the medium term. We do not foresee a new funding round in the short term. Additional funding might be required when our production facilities are fully booked with orders and the company will have the need to expand the manufacturing site.
The private aircraft industry is susceptible to macroeconomic trends. An overall downturn of the economy might lead to a reduction of the market size and potential clients. However, the current economic conditions might allow for finding new niches in new markets in case of a crisis in one or more of the main markets.
Incumbents or new challengers might introduce disruptive innovation in the market. The amphibious industry, however, has not experienced major waves of innovation in latest years. Moreover, ATOL Avion is constantly monitoring the market and investing in R&D.
R&D and sales are key for the success of the company. There might be a risk of underperforming in these departments but the team has been building an efficient network for a long time now and has a good balance between operational and business tasks.
The investment in the company is an investment in unlisted shares which carries risks of possible dilution, loss of all or part of the investment and other common risks associated with unlisted investments. The entrepreneurs share the same, if not greater, risks as the other shareholders and are fully committed to working towards the success of the company.
|Sales||0 €||0 €||900.000 €||2.200.000 €||5.600.000 €|
|Sales growth %||0.0%||0.0%||144.4%||154.5%|
|Operational costs||5.000 €||41.000 €||863.000 €||2.047.000 €||4.586.000 €|
|EBITDA||-5.000 €||-41.000 €||37.000 €||153.000 €||1.014.000 €|
|Forecasted CAGR (forward 4 years)||Inf%|