ascom annual results presentation 2013 · 2017-06-07 · media and analyst conference 2013 annual...
TRANSCRIPT
WELCOME TO THE ASCOM
MEDIA AND ANALYST CONFERENCE
2013 ANNUAL RESULTS
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ASCOM
MISSION-CRITICAL WIRELESS COMMUNICATION
TRUSTED PARTNER FOR WIRELESS NETWORKINVESTMENT AND MANAGEMENT
WORK-FLOW OPTIMIZATION IN HEALTHCARE
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LEGAL DISCLAIMER
Ascom Annual Media Conference 2014
This document contains specific forward-looking statements, e.g. statements including terms like“believe”, “expect” or similar expressions. Such forward-looking statements are subject to known andunknown risks, uncertainties and other factors which may result in a substantial divergence betweenthe actual results, financial situation, development or performance of Ascom and those explicitlypresumed in these statements.
Against the background of these uncertainties readers should not rely on forward-lookingstatements. Ascom assumes no responsibility to update forward-looking statements or adapt them tofuture events or developments.
THE EXECUTIVE BOARD
Ascom Annual Media Conference 2014
Fritz Mumenthaler Bianka Wilson Claes Ödman Rikard Lundqvist
FRITZ MUMENTHALER
CHIEF EXECUTIVE OFFICER
BIANKA WILSON
CHIEF FINANCIAL OFFICER
CLAES ÖDMAN
GENERAL MANAGER
WIRELESS SOLUTIONS
RIKARD LUNDQVIST
GENERAL MANAGER
NETWORK TESTING
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Review 2013 2013 Financial Results Ascom Wireless Solutions Ascom Network Testing Outlook
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AGENDA 5 MARCH 2014
Ascom Annual Media Conference 2014
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FRITZ MUMENTHALER
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REVIEW 2013
Ascom Annual Media Conference 2014
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ASCOM ACHIEVEMENTS 2013
1 DELIVERED ON STRATEGY – BUILT THE BASE FOR FUTURE GROWTH
3 FINANCIAL KPI’S SUBSTANTIALLY IMPROVED
2 DELIVERED ON OPERATIONAL EXCELLENCE
7Ascom Annual Media Conference 2014
DELIVERED ON STRATEGY – BUILT THE BASE FOR FUTURE GROWTH
Realized strong growth in incoming orders and order backlog
Expanded foot-print in the healthcare segment (Wireless Solutions Division)
Leveraged leading market position in EMEA and Americas (Network Testing Division)
Made a bolt-on acquisition in a growth market
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ASCOM ACHIEVEMENTS 2013
Ascom Annual Media Conference 2014
DELIVERED ON OPERATIONAL EXCELLENCE
Achieved again a high EBITDA margin in Wireless Solutions
Sustained the turnaround in Network Testing
Streamlined and adjusted the Head Office
Completed the last step towards an asset-light Ascom
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ASCOM ACHIEVEMENTS 2013
Ascom Annual Media Conference 2014
FINANCIAL KPI’S SUBSTANTIALLY IMPROVED
Delivered EBITDA of 15.7% in the core business
Delivered Group profit of CHF 36.9 million (PY CHF 21.8 million)
Delivered strong operating cash flow of CHF 63.3 million
Reduced net debt to CHF 2.9 million (PY CHF 41.3 million)
Increased equity ratio to 51.6%
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ASCOM ACHIEVEMENTS 2013
Ascom Annual Media Conference 2014
Finalized integration of GE Nurse Call; further leverage of patient systems business initiated
Strengthened and broadened its strategic position in the attractive healthcare market through strategic wins
Realized good growth in incoming orders andin order backlog
The higher order backlog, the acquisition of Integrated Wireless, the initiated growth measures as well as further planned acquisitions will bolster profitable growth
ASCOM WIRELESS SOLUTIONS
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Solution provider for work-flow optimization in healthcare
Ascom Annual Media Conference 2014
Leveraged its global #1 market position to expand its business in EMEA and in the Americas
Commitment to innovation resulted in a leading position in VoLTE, a unique offeringin Test & Measurement (iPhone testing andBlixt) and a promising eContracts platformfor operators (Systems & Solutions)
Order backlog, initiated growth initiativesand favorable market dynamics will bolster profitable growth
ASCOM NETWORK TESTING
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Trusted partner in wireless network investment and management
Ascom Annual Media Conference 2014
BIANKA WILSON
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2013 FINANCIAL RESULTS
Ascom Annual Media Conference 2014
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SIGNIFICANT ACHIEVEMENTS IN 2013
1) Core business = Total Group minus non-core activities (segment “Other”) comprising real estate activities related to businesses disposed of in prior years
Ascom Annual Media Conference 2014
AscomGroup
Incoming order growth of 9.5% Revenue growth of 2.2% Increased EBITDA margin to 14.7% (PY 10.9%) Profit of CHF 36.9m (PY CHF 21.8m)
Core business1)
Incoming order growth of 10.6% Revenue growth of 2.7% EBITDA margin of 15.7%
Wireless Solutions
Incoming order growth of 7.6% Revenue growth of 2.8% Increased EBITDA margin to 17.3% (PY 16.2%)
Network Testing
Incoming order growth of 17.7% Revenue growth of 2.2% Increased EBITDA margin to 13.4% (PY n/a)
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GROWTH ANALYSIS
Ascom Annual Media Conference 2014
1) Core business = Total Group minus non-core activities (segment “Other”) comprising real estate activities related to businesses disposed of in prior years
CHFm 2012 Organic FX Inorganic 2013 ∆ 13/12Incoming ordersWireless Solutions 296.1 2.7% 0.9% 4.0% 318.7 7.6%
Network Testing 118.6 17.7% - - 139.6 17.7%
Core business1) 414.3 7.0% 0.7% 2.9% 458.1 10.6%
Other 22.1 2.1% 0.1% -12.0% 19.9 -9.8%
Ascom Group 436.4 6.8% 0.6% 2.1% 478.0 9.5%
RevenueWireless Solutions 297.7 -0.9% 0.9% 2.8% 306.1 2.8%
Network Testing 130.4 2.1% 0.1% - 133.3 2.2%
Core business1) 427.8 0.1% 0.7% 1.9% 439.2 2.7%
Other 22.0 4.4% 0.1% -11.6% 20.5 -7.2%
Ascom Group 449.8 0.3% 0.6% 1.3% 459.7 2.2%
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REVENUE BY REGION / KEY COUNTRY
USUS
EMEAEMEA
AmericasAmericas
CHCH
APACAPAC
83
336
47
95 19
91
101
345
44
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Ascom Annual Media Conference 2014
NLNL
69 69
DEDE
54 58
(Based on location of customer)
Corporate / division headquarterSubsidiary or branchAcquired 2 January 2014
Key country = > 10% of Group revenue
20132012
CHFmCore business1) Other
2012 2013 2012 2013Incoming orders 414.3 458.1 22.1 19.9Revenue 427.8 439.2 22.0 20.5Gross profit / (loss) 215.9 228.3 1.2 (1.2)Gross margin (%) 50.5% 52.0% 5.5% n/aEBIT 26.2 49.4 0.3 (1.8)EBIT (%) 6.1% 11.2% 1.4% n/aEBITDA 48.3 68.9 0.7 (1.3)EBITDA (%) 11.3% 15.7% 3.2% n/a
CORE BUSINESS IN FOCUS
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Most dilutive non-core activities will discontinue end 2015
1) Core business = Total Group minus non-core activities (segment “Other”) comprising real estate activities related to businesses disposed of in prior years
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CONTINUED EBITDA IMPROVEMENT IN CORE BUSINESS
Ascom Annual Media Conference 2014
48.2
53.1
4.3-2.0
-0.52.7
0.4
EBITDA2012
Volumeimpact
Marginimpact
Func.costs
One-offs Others EBITDA2013
Wireless Solutions
-4.6
17.9
11.6
11.8
1.4 - 1.1 - 1.2
EBITDA2012
Restruct.expense
Savings Volumeimpact
Marginimpact
Others EBITDA2013
Network Testing
Driven by volume increase and savings(CHFm)
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SIGNIFICANT IMPACT OF H1/H2 SEASONALITY
Ascom Annual Media Conference 2014
H2 delivers higher revenue and better profitability(CHFm)
141.5 156.2 149.7 156.4
53.0%49.1% 50.5% 50.9%
15.0% 17.3%14.0%
20.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
100
150
200
H1/2012 H2/2012 H1/2013 H2/2013
Wireless Solutions
Gross margin EBITDA margin
60.8 69.6 65.2 68.1
41.0%
52.7% 55.7% 55.4%
10.3% 11.8% 15.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
50
100
H1/2012 H2/2012 H1/2013 H2/2013
Network Testing
Gross margin EBITDA margin
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EBITDA TO GROUP PROFIT RECONCILIATION
Ascom Annual Media Conference 2014
67.6
36.9
- 20.0
- 1.9 - 3.1 - 1.0 - 4.7
EBITDA 2013 Depreciation /amortization
Net FX losses Net interestexpenses
Other financialexpenses
Income tax Group profit 2013
38% EBITDA increase leads to nearly 70% higher Group profit(CHFm)
10.5
4.7
2.5
2.1
-8.5
-1.9
Expected income tax expenses 2013
Effect of income/ expenses taxed with a different rate or not
taxed
Net effect from deferred tax
Net effect from tax loss carry-forwards
Other effects Income tax expenses 2013
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TAX BRIDGE
Significant tax reduction due to tax loss carry-forwards(CHFm)
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EXCELLENT CASH GENERATION
Ascom Annual Media Conference 2014
63.1 58.2
67.6
20.9 - 11.3 - 8.6
- 12.2 - 9.0
-42.9
- 12.2 2.8
Cash at1.1.2013
EBITDA NWCimprovement
Provisionrelated cash
flows
CapEx Acquisition Interest andtax payments
Debt relatedcash flows
Dividend /capital
distribution
Other cashflows
Cash at31.12.2013
Strong cash generation enables balance sheet efficiency(CHFm)
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IMPROVED BALANCE SHEET EFFICIENCY
Ascom Annual Media Conference 2014
Enables future priorities for capital allocation(CHFm)
101.2 80.3
-40
0
40
80
120
2012 2013
Net working capital (NWC)
Trade receivables InventoriesTrade payables Customer prepaymentsTotal NWC
32% 52%
-130
-80
-30
20
70
120
2012 2013
Net debt and Equity ratio
Cash and equivalents BorrowingsNet debt Equity ratio (in %)
8.6
12.2
14.4
2011 2012 2013
Dividends
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RETURN TO SHAREHOLDERS
Ascom Annual Media Conference 2014
Demonstrated commitment to consistent cash return
0.64
1.07
2012 2013
Earnings per share (EPS)Pay-out ratio:
37% 56% 39%
Proposed
Note: Distribution per share in the following year based on prior year’s profit, i.e. dividend proposed to 2014 AGM based on the profit for the year 2013
(CHFm, except per share data)
Attractive value play after sucessful turnaround
ASCOM GROUP 2013 IN SUMMARY
RevenueCHF 459.7m
Gross margin49.4%
EBITDACHF 67.6m
FCF (excl. M&A)
CHF 56.9m
Customer ROI at the core of our work
Maintained strategic focus
Solid balance sheet
Asset light strategy
EmployeesFTE 1,586
Strong cash flow generation
Expanded international market leadership Global presencein 17 Countries
US20%
of Group revenue
Total Assets
CHF 477.8m
Improved core business profitability
Ascom Annual Media Conference 2014
EPSCHF 1.07
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2014 CFO PRIORITIES
1 Enable growth initiatives
3 Active investor relations
2 Continue focus on financial and operational excellence
4 Provide transparency
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ASCOM WIRELESS SOLUTIONSCLAES ÖDMAN
Focus segment healthcare grew by 6% in revenue
> now 56% of divisional revenue
Service business grew 6%
Strong performance of software business
Integration of GE Nurse Call concluded
> Achieved strong growth in nurse call in US
Global Product Lines implemented
> Mobility, Unite Software, Patient Systems, and Services
Acquired Integrated Wireless, Australia
> Increased footprint in Asia / Pacific
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2013 – HIGHLIGHTS
Ascom Annual Media Conference 2014
Mirrors strategic focus, with 70% of revenue in healthcare and elderly care Enables direct access to Australian and New Zealand markets Creates product portfolio enhancement opportunities Aligned with strategic priority to further build the APAC market position Annual revenues of AUD 13-14 million in fiscal year 2012/13 with broad
customer base and good EBITDA margins
specialized provider of emergency wireless communicationsystems and workflow solutions in Australia.
2 January 2014 - Ascom Wireless Solutions closed the acquisition of Integrated Wireless, a
RECENT M&A
Ascom Annual Media Conference 2014 29
CUSTOMER RETURN ON INVESTMENT – AT THE CORE OF OUR BUSINESS
„Sampson Regional Medical Center (US):
Annual savings of USD 261,923 or 9,944 hours
across 12 hospital units –investment payback
period 351 days“
„Medstar Franklin Square Medical Center (US):
[Ascom lets] the human process drive the technology, not
technology revolution drive the human process“
„The ROI at Children‘s Hospital of Philadelphia:
reduced overhead paging, reduced message delivery time, fewer calls to department secretary, fewer handset repairs“
Strategic 2013 wins• King’s Health, London
• Klinikum Stuttgart, Germany
• Baptist Health South Florida, US
• Nytt Östfoldsykehus, Norway
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GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND
Ascom Annual Media Conference 2014
Develop SW business
Nurse call globalization
Service expansion
Growth market focus
OEM market share
Next generation smart device
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Develop SW business
Nurse call globalization
Service expansion
Growth market focus
OEM market share
Next generation smart device
Accelerate sales of software portfolio
• For example:
• Dedicated SW sales experts
• GE patient monitoring sales partnership
• Smartphone client
GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND
33Ascom Annual Media Conference 2014
Develop SW business
Nurse call globalization
Service expansion
Growth market focus
OEM market share
Next generation smart device
Introduce Ascom Nurse Call into new markets, and grow nurse call market share in existing Europe
• For example:
• Introduce European wireless nurse call system into US elderly care market
• Bring acquired GE portfolio into Asian and Middle East markets
GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND
34Ascom Annual Media Conference 2014
Develop SW business
Nurse call globalization
Service expansion
Growth market focus
OEM market share
Next generation smart device
Develop Services into a business in its own right
• For example:
• Increased professional services through larger and more complex deals
• Dedicated service sales experts
GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND
35Ascom Annual Media Conference 2014
Develop SW business
Nurse call globalization
Service expansion
Growth market focus
OEM market share
Next generation smart device
Continue building Ascom presence in growth markets – Middle East and Asia
• For example:
• Introduce full Ascom portfolio into Australian market – Integrated Wireless acquisition
• Build from Ascom regional hub in Singapore and Dubai respectively
• Execute smaller acquisitions for market presence
GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND
36Ascom Annual Media Conference 2014
Develop SW business
Nurse call globalization
Service expansion
Growth market focus
OEM market share
Next generation smart device
Increase market share with OEM partners
• For example:
• Projects to ramp up new OEM customers
• Jointly push large projects
GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND
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Develop SW business
Nurse call globalization
Service expansion
Growth market focus
OEM market share
Next generation smart device
Truly purpose-built device with workflow intelligent software
• For example:
• User experience specialists shadow nurses globally
• Interviews with stake holders and decision makers in the hospitals
• Unique understanding of how workflows can be optimized
• Unique healthcare and nurse specific features
GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND
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WIRELESS SOLUTIONS – STRATEGIC TRANSITION
Ascom Annual Media Conference 2014
Global leader in healthcare workflow and communications
Global presence –solutions provider in healthcare
One portfolio
Process excellence
Thought leader
Yesterday Today Tomorrow
Product House for dedicated on site mobility.Europe presence.
System House for on site mobility and nurse call.Europe and US presence.
Solutions Provider for point of care workflow optimization in healthcare.Global presence.
Market positioning
Innovation
Operational efficiency
Mobility and alarmingfor segments with mission critical needs.
Supply chain excellenceOwn manufacturing - all disciplines in-house.Autonomous NSU.Functional organization.
Mobility, Software and Patient Systemsbusinesses in their own right. Regional gaps.
Products and professional services optimized for direct and indirect business globally
Supply chain excellenceAsset-light - outsourcingDiverse regions.Product lines introducedMatrix organization.
Process excellenceDivisional transparency through one ERP.Common divisionaloperating model.
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ASCOM NETWORK TESTINGRIKARD LUNDQVIST
Returned to growth Incoming orders: +17.7%
Revenue: +2.2%
Restructuring completed CHF 20 million savings realized
17.1% reduction of functional costs
8.3pp improvement in gross margin
Broad portfolio provided strategic advantage
Achieved leading position for Voice over LTE (VoLTE)
Launched unique innovations – iPhone offering & Blixt™ testing methodology
Realized strong development in EMEA region
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2013 - HIGHLIGHTS
Ascom Annual Media Conference 2014
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CUSTOMER RETURN ON INVESTMENT – AT THE CORE OF OUR BUSINESS
Multi-year contract from one of Europe's largest operators
Multiple VoLTE-driven orders
Regulators in Latin America, Middle East & Africa
Tier-1 US operators benchmarking & service assurance
Ascom Annual Media Conference 2014
„During single site verification, US customer
saved 30-50% of time from data collection to
report generation“
„US customer reduced time spent on cluster optimization from 3-4
hours to 1-1.5 hours for an estimated 30-50%
time savings“
„European customer monitors quality of
experience 24x7 in live use to earn more revenue
and retain or win back customers lost to OTT application services“
Strategic 2013 wins
GROWTH INITIATIVES
Ascom Annual Media Conference 2014
Capacity Management
Blixt™Licensing
App & ServiceBenchmarking
ManagedServices
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Radio Access Network makes up ~ 65% of a wireless operators total CAPEX
Just-in-time approach improves RAN CAPEX efficiency by ~ 35%
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CAPACITY MANAGEMENT
Ascom Annual Media Conference 2014
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Capacity limitsWhen to expand
What specific network elements have reached their limits
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Available Bandwidth Measurement (ABM) Technology
Faster and less intrusive than old methods
Providing simultaneous measurement of upload, download and delay
More than 90% bandwidth savings compared to old methods
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BLIXT™ - WHAT IS IT?
Ascom Annual Media Conference 2014
Device (UE)
iTunes or App Store
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2
4
EPC
IP Network
Netflix
Battery saving
Data Tx/Rx saving Faster update
Optimize service delivery
Radio Network (RAN)
Core Network
Benefits of Blixt™
Winner of 2013 Fierce Innovation Awards: Telecom Edition
Unique operator-reviewed awards program from the publishers of FierceWireless, FierceTelecom, and FierceCable
Executives from AT&T, Cablevision System Corporation, Comcast, Cox Communications, MetroPCS, Rogers Communications, TeliaSonera International Carrier, Verizon
Evaluation based on:
technology innovation
financial impact
market validation
end-user customer experience
BLIXT™ - WINNER OF AN INNOVATION AWARD
“The Fierce Innovation
Awards celebrate the
companies who are on the
cutting edge of innovation
in the wireless, wireline and
advanced TV and network
sectors of our industry”
Ascom Annual Media Conference 2014 45
BLIXT™ - LICENSING OPPORTUNITY
• Visibility into customer experience• Customer engagement – customer care
Network Operators
• Improved battery life• Reduce app/service frustration – improve
customer experience
Smartphone OEMs
• Embed test functionality for greater network awareness
• Improve app & service performance
App & Service Providers
Ascom Annual Media Conference 2014 46
Wireless performance data:• Collected by smartphones• Transmitted to server• Automatically processed• Presented on dashboard & map
On a site hosted and managed by Ascom in the cloud.
Wireless performance data:• Collected by smartphones• Transmitted to server• Automatically processed• Presented on dashboard & map
On a site hosted and managed by Ascom in the cloud.
MANAGED SERVICES
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MANAGED SERVICES – MULTINATIONAL DEPLOYMENT
Ascom Annual Media Conference 2014
APPLICATION & SERVICE BENCHMARKING
Ascom Annual Media Conference 2014
IMS
Data
Messaging
Voice
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0
1
2
3
4
5
A‐LTE B‐LTE C‐WCDMA D‐EVDO E‐WCDMA F‐EVDO
Average MOS-V Score
Viewing Interruptions
Video Quality
Metrics:
Typical UsageMonitoringTrouble-shootingRegression testingBenchmarking
Recovery of Asia / Pacific business
> Measures already initiated
Expanding analytics & services business
Solutions-selling expansion outside of North America
New offerings with Blixt™ licensing, Capacity & eContracts ManagementMore favorable product mix and improved operational efficiencies to grow
margins
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2014 - FOCUS
Ascom Annual Media Conference 2014
Global leader in network performance assurance
Trusted brand with CxO visibility, thought leader and advisor
End-to-End solutions-provider
Stable recurring revenue streams and consistent growth
NETWORK TESTING - STRATEGIC TRANSITION
Yesterday Today Tomorrow
Technology leader in wireless network drive testing tools
Independent auditor of wireless network performance
Deep under-standing of network test metrics
Dependency on OEM & rollout
Strongest product portfolio across wireless testing
Global sales and service reach
Unique capabilities
Solution portfolio able to address CxO objectives
Trusted relationships
Trusted partner in wireless network investment and management
51Ascom Annual Media Conference 2014
Market positioning
Associated core assets
FRITZ MUMENTHALER
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OUTLOOK
Ascom Annual Media Conference 2014
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STARTING POINT
Organic growth 2014 supported by increased order backlog
Acquisition of Integrated Wireless (Australia) contributes to inorganic growth
Concrete growth initiatives in both divisions
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OUTLOOK
Ascom Annual Media Conference 2014
Targets 2014*
• Target growth: 5-10% (organic and inorganic growth)
• Target EBITDA margin: 15-16%
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OUTLOOK CORE BUSINESS
Ascom Annual Media Conference 2014
* Outlook assumes a steady economical environment and at least stable currency relations.
Targets 2015*
• Target growth: 5-10% (organic and inorganic growth)
• Target EBITDA margin: 16-17%
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2014 PRIORITIES FOR CAPITAL ALLOCATION
Ascom Annual Media Conference 2014
Focus on healthy, sustainable shareholder return
Steady organic growth leading to increased return
Smart bolt-on acquisitions
Continued investment in innovation and technology leadership
Sustainable dividend
Proposal to the Annual General Meeting of 1 April 2014:
Distribution of CHF 0.40 per share
Total distribution of 14.4 CHF million
Pay-out ratio of 39%
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SHAREHOLDERS – HIGHER DIVIDEND PAYMENT
Ascom Annual Media Conference 2014
Q&A
57Ascom Annual Media Conference 2014
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Ascom Holding AG
Corp. Communications / IR Tel: + 41 41 544 78 00Zugerstrasse 32 Fax: + 41 41 761 97 256340 Baar [email protected]
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GROUP CONTACT
Ascom Annual Media Conference 2014
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THANK YOU
Ascom Annual Media Conference 2014 59