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AXIS CommunicationsA world of intelligent networks
Second quarter 2001 Presented by
Peter Ragnarsson
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Positioning Axis for profitability
Axis will be profitable second half of 2001
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Highlights - Structure
Clear structure Netch sold
Mobile Access Server sold
Focus on network connectivity
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Highlights - EBIT
-57 -55 -62
-42-29
-10-31
-20
-80
-70-60
-50
-40
-30-20
-10
0
q2-00 q3-00 q4-00 q1-01 q2-01
EBIT Structural
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Highlights - Sales
Half year 2001 Sales 353 Mkr (320)
Growth 10% ThinServers: +17% Netch: -45% (sold)
Sales(proforma 2000)
50
100
150
200
250
300
350
400
q2 accum
SE
K m
Prev year Current year
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Highlights - Sales
Axis grows in weak IT-market Global company
Market positions
Product portfolio
Broad customer base
Distribution channels
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Highlights - EBIT
Reduced production costs Productions problems solved
Positive impact 3-5 percentage units
Reduced overhead cost level Costs down >100 M annually
Profitability second half of 2001
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Segments
Networked Office Professional buyers
Organizations >50 employees
Office connectivity OEM Industrial customers
Camera IT
Security / surveillance
Technology
Mobile Internet
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Networked Office - sales q2 2001
Total sales 73.4 Mkr (81.5)
Growth –9.9%
Strategic segment
Profitable base
Sales(proforma 2000)
0
25
50
75
100
125
150
175
q2 accum
SE
K m
Prev year Current year
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Office Connectivity OEM - sales q2 -01
Total sales 34.9 Mkr (21.7)
Growth 60.8%
Continuous demand for built-in printserver solutions
Sales(proforma 2000)
0
25
50
75
100
125
150
175
q2 accum
SE
K m
Prev year Current year
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Camera - sales q2 2001
Total sales 56.5 Mkr (44.4)
Growth 27.3%
Launch Axis 2420
Collaboration with Milestone
Sales(proforma 2000)
0
25
50
75
100
125
150
175
q2 accum
SE
K m
Prev year Current year
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Camera
New order approx. $ 1 M Mexican Election Authority (Instituto
Federal Electoral)
Axis Network Cameras part of integrated solution for producing Mexican ID-cards
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Mobile Internet - sales q2 2001
Strategic area Wireless technologies
(WLAN, Bluetooth, etc)
Platform
Technology and market uncertainties
Sales(proforma 2000)
0.0
2.5
5.0
7.5
10.0
12.5
15.0
17.5
q2 accum
SE
K m
Prev year Current year
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Highlights q2 2001 - EBIT
Towards profitability as planned Axis (excl. structural costs) up 5.5 Mkr
compared to q2-2000
Heavy R&D investments Mobile Internet 25 Mkr R&D total 50 Mkr
Structural changes
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Highlights q2 2001 - EBIT
Items influencing EBIT Temporary production problems solved
in June, but unfavourable production allocation impacts also q2
Administrative costs related to restructuring activities
Lay-off program -20 Mkr
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EBIT analysis q2-2001 (proforma q2-2000)
April-June 2001 April-June 2000
ThinServer products 0.7 -11.2
Mobile Internet -24.7 -18.6
Corporate functions -15.2 -14.8
Sub-total Axis excl structural and Netch
-39.1 -44.6
Structural cost Axis -20.3 -
SUB-TOTAL Axis excl Netch
-59.4 -44.6
Netch 9.8 -11.9
TOTAL -49.6 -56.6
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EBIT by quarter (proforma 2000)
R&D overall 50 Mkr in q2-2001
New structure 20 Mkr restructuring
costs in q2-2001
Restructuring costs in q4 and q1 relates to Netch
Towards profitability as planned
EBIT by quarter (proforma 2000)
-57 -57 -55-62
-42-29
-10
-31
-20
-80
-70
-60
-50
-40
-30
-20
-10
0
q1-2000
q2-2000
q3-2000
q4-2000
q1-2001
q2-2001
SE
K m
EBIT Structural
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ThinServer products - EBIT q1 2001
Profitability in focus Action program
reduces cost by 15%
EBIT level improved significantly
Action program impacts profitability from q3 and onwards
EBIT by quarter (proforma 2000)
-31
-11-7
1 0 1
-35
-30
-25
-20
-15
-10
-5
0
5
q1-2000
q2-2000
q3-2000
q4-2000
q1-2001
q2-2001
SE
K m
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Mobile Internet products - EBIT q2 -01
Intensive R&D Total investment in
q2-2001 25 Mkr (19)
Investment level reduced during 2001
EBIT by quarter (proforma 2000)
-14-19
-21
-34
-24 -25
-40
-35
-30
-25
-20
-15
-10
-5
0
q1-2000
q2-2000
q3-2000
q4-2000
q1-2001
q2-2001
SE
K m
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Change in liquid funds – q2 2001
Jan – June 2001
Opening balance 196.0
Cash-flow from operations -44.5
Investment in other fixed assets -17.6
Financing activities 30.6
Other -
Closing balance 164.5
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Balance sheet - assets
June 2001 Dec 2000
Fixed assets 167.9 160.1
Inventories 51.5 60.1
Acc. Receivables 109.5 138.0
Other current rec. 28.6 73.2
Liquid funds 164.5 196.0
TOTAL ASSETS 522.1 627.4
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Balance sheet - liabilities & equity
June 2001 Dec 2000
Equity 267.6 379.7
Minority - 12.1
Provisions 30.1 15.2
Long-term loans 61.0 51.4
Short-term liab. 163.4 169.0
TOTAL LIAB & EQUITY
522.1 627.4
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Market trends 2001
Generally weak market conditions expected for the rest of year 2001
Market and technology delays in wireless area
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Axis 2001
Focus on network connectivity
Global presence
Industry insider
R&D portfolio
Established channels to markets
Track record
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Outlook 2001
Profitable second half of year 2001