Enea Ab · OMXSTO:ENEA
Enea Ab — FY2008 Earnings Presentation
29 slides from Enea Ab's earnings presentation, Feb 6, 2009
Slide 1: Slide 1
Slide 2: Enea Full Year Results 2008
Enea Full Year Results 2008 Åsa Landén Ericsson, CEO February 6, 2009
Slide 3: Agenda
Agenda Corporate Overview Highlights and Financials 2008 Market Outlook, Opportunities and Growth Factors
Slide 4: Leader in Communications Software and Services
Leader in Communications Software and Services Global software and services company focused on solutions for communication-driven products – since 1968 Primary segments: telecom, avionics, automotive and med tech 750 employees: 500 in Sweden, 120 in Romania, 90 in the US and 40 in EMEA and Asi
Slide 5: Global Footprint – Global Customers
Global Footprint – Global Customers
Slide 6: Software Portfolio
Software Portfolio Run-time software - OSE™, Real Time Operating System Products Family - Polyhedra™, In Memory Database - Element™ Middleware Platform - LINX™ Communications Software - Enea dSPEED Platform™ - Netbricks Protocols Tools - Optima™ Eclipse-based Software Development tools - Zealcore™ E
Slide 7: Services Portfolio
Services Portfolio Over 550 professional services staff, located in Kista, Linköping, Lund, Bucharest, Nashua and Phoenix Focus on software development and test Competence centers - Linux - Mobile platforms - Middleware platforms - Software quality assurance (to be set up 2009) North America
Slide 8: Healthy Share of Recurring Revenue
Healthy Share of Recurring Revenue Software (~80%) Services (~20%) Royalty Time & Material Rental Project assignments Perpetual Fixed fee assignments Support & Maintenance
Slide 9: 2008 at a Glance
2008 at a Glance Acquisitions of IP Devel, Netbricks and ZealCore Launch of Enea Accelerator Platform 2.0 – software platform for carrier-grade systems. E.g., broadband access, VoIP, IPTV, gaming, streaming video Launch of OSE Multicore Edition Largest customized software deal in Enea histor
Slide 10: Agenda
Agenda Corporate Overview Highlights and Financials 2008 Market Outlook, Opportunities and Growth Factors
Slide 11: Fourth Quarter 2008
Fourth Quarter 2008 Net sales grew by 9 percent to 252 (232) MSEK - Organic growth 4 percent, 5 percent acquired Software sales grew by 18 percent to 99 (84) MSEK Services and other revenue grew by 3 percent to 153 (148) MSEK Operating profit decreased by 4 percent and amounted to 23 (24) MS
Slide 12: Full Year Results 2008
Full Year Results 2008 Net sales grew by 12 percent to 918 (821) MSEK - Organic growth 9 percent, acquired 3 percent Software sales grew by 9 percent to 338 (312) MSEK Services and other revenue grew by 14 percent to 579 (509) MSEK Strong cash flow from operating activities of 82 (66) MSEK,
Slide 13: Stable Financial Position
Stable Financial Position Cash on hand 122 MSEK, despite cash effects from acquisitions of -60 MSEK Strong positive cash flow from operating activities of 82 MSEK Unused credit facilities of 250 MSEK (100+150) Solid equity/assets ratio of 71%
Slide 14: Five Year Development
Five Year Development Net Sales, MSEK EBIT, MSEK Operating Margin, % 80 9 1000 900 8 70 800 7 60 700 6 50 600 5 500 40 4 400 30 3 300 20 2 200 10 1 100 0 0 0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008
Slide 15: Savings Program H1 2009
Savings Program H1 2009 Affects the Software business area, primarily R&D Target of total savings of 15 MSEK in 2009 Among other measures, staff reduction of 25 in Kista Set against the back-drop of: - falling operating margin - expansion of the product portfolio has increased R&D costs over
Slide 16: Enea Group Sales Distribution
Enea Group Sales Distribution Business Area Industry Segment Geography 9% 22% 14% 37% 46% 63% 77% 32% Telecom Infrastructure Nordic North America Telecom Handset Services Software Others EMEAA
Slide 17: Enea Software – Gross Margin
Enea Software – Gross Margin MSEK 80 90% 70 80% 60 70% 50 60% 50% 40 40% 30 30% 20 20% 10 10% 0 0% 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Gross Profit Gross Margin • Gross Margin equals Sales minus third party cost, amortization of intangibles, order&delivery
Slide 18: Enea Services – Gross Margin
Enea Services – Gross Margin MSEK 40 30% 35 25% 30 20% 25 15% 20 10% 15 5% 10 0% 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Gross profit Gross margin • Gross Margin equals sales minus personnel related costs associated with providing services
Slide 19: Agenda
Agenda Corporate Overview Highlights and Financials 2008 Market Outlook, Opportunities and Growth Factors
Slide 20: Telecom Market 2009
Telecom Market 2009 Infrastructure - Ericsson: ”Planning for zero growth” - NSN: ”Expecting 5% decline in Euro terms” - Huawei: ”Expecting 30% growth” Handsets - Unit sales predicted to fall for first time ever - Nokia forecasts 2009 volumes will shrink by 10% over 2008 BUT - Enea sales are dr
Slide 21: Technology Development Drives Demand for Enea Software and Services
Technology Development Drives Demand for Enea Software and Services
Slide 22: Handset Software R&D and BoM Increasing
Handset Software R&D and BoM Increasing Software R&D More complex Software phones drive new Enea sales Source: Strategy Analytics
Slide 23: Multicore: Growth Opportunity for OSE
Multicore: Growth Opportunity for OSE Number of R&D projects using multicore processors may increase five-fold over the coming two years The market for embedded multicore software will reach 355 MUSD in 2010 (VDC estimate) with an annual growth rate of over 50 percent Telecom/datacom market re
Slide 24: Strategy
Strategy Broaden offering and customer base through organic growth and acquisitions Combine software and services expertise Embrace open source software Expand outsourcing and bridged services projects Increase presence in Asia Work with channel partnerships
Slide 25: Why invest in Enea?
Why invest in Enea? More devices contain embedded software systems – increasing need for expertise An industry leader in the telecom market Financial backing to increase growth through strategic acquisitions Proven ability to grow with solid profitability and positive cash flow Well positi
Slide 26: THANK YOU!
THANK YOU! For further information, please contact: Åsa Landén Ericsson, +46 8 507 140 00, asa.landen.ericsson@enea.com Carl Sköld, +46 8 507 140 00, carl.skold@enea.com
Slide 27: IP Devel Acquisition
IP Devel Acquisition Specialized in embedded systems development and test services History of profitable growth - Net sales for 2007 were EUR 4 million - 120 employees Enea acquires 100 percent of the shares for EUR 3.2 million in cash, with additional payment after four years based on financi
Slide 28: Netbricks Acquisition
Netbricks Acquisition Leading developer and supplier of network communication software Well-run and profitable company with solid growth - Net sales for 2007 exceeded EUR 2.5 million - 17 employees, offices in France and Israel Enea acquires 100 percent of the shares for EUR 3 million in cash,
Slide 29: Zealcore Acquisition
Zealcore Acquisition A continuation of Enea’s strategy to acquire “plug-in” technology companies Tools sales cycle different from run-time software sales cycle Leading provider of best-in-class debug and diagnostic software tools for complex, mission-critical, embedded systems ZealCore tools