Enea Ab · OMXSTO:ENEA
Enea Ab — FY2006 Earnings Presentation
32 slides from Enea Ab's earnings presentation, Feb 6, 2007
Slide 1: Year End Report 2006
Enea Year End Report 2006 February 6, 2007 Johan Wall President & CEO Håkan Gustavson CFO
Slide 2: Enea Corporate Overview
Enea Corporate Overview A leading provider of Network software • 500+ employees Global Presence • North America, Sweden, France, Germany, • United Kingdom, China and Japan Unique software technology powering • Millions and millions of mobile phones • Half of all radio base stations • Satellite netwo
Slide 3: Objectives
Objectives Financial objectives: • Annual sales increases in excess of 15 percent • Operating margins exceeding 10 percent Operating objective: • Sales mix: 50% software / 50% services Enea Year-End Report 2006, February 6, 2007 3
Slide 4: We Have Marquee Customer Momentum
We Have Marquee Customer Momentum Enea Year-End Report 2006, February 6, 2007 4
Slide 5: Enea Software Offering
Enea Software Offering Run-time software - OSE™, Real Time Operating System Family of Products - Element™ Middleware Platform - Polyhedra™, In Memory Database - LINX™ Communications Software - NASP Telecom-in-a-box Software Tools - Optima™Eclipse-based Software Development tools - Illuminator™ Run-t
Slide 6: Strong International Services Offering
Strong International Services Offering • Providing full life-cycle professional services – application development, systems development, systems integration, maintenance and technical training • Industry recognized expertise • Embedded systems focus • 300+ professionals in USA and Sweden Enea Year-E
Slide 7: Enea Alliance and Partner Program
Enea Alliance and Partner Program • Provides access to pre-integrated solutions and accelerated time to revenue • Lower internal R&D effort • Focus area, key differentiator for Enea Enea Year-End Report 2006, February 6, 2007 7
Slide 8: Enea Solutions Create Great Value for Clients
Enea Solutions Create Great Value for Clients • We provide exceptional value • Lower development costs, reduced time to market, increased innovation • Enea in joint R&D projects with major telecom companies • Intellectual properties remain with Enea Enea Year-End Report 2006, February 6, 2007 8
Slide 9: Enea Product Portfolio for Telecom Infrastructure
Enea Product Portfolio for Telecom Infrastructure Customer Customer Customer Application Application Application Professional Services Third-party Middleware Network Databases X X X applications Element protocols Polyhedra & stacks Communications - LINX RTOS Linux OSE-family Hardware Enea software T
Slide 10: Enea has Trusted Relationships with Customers
Enea has Trusted Relationships with Customers Enea Year-End Report 2006, February 6, 2007 10
Slide 11: Q4 and Financials
Q4 and Financials Enea Year-End Report 2006, February 6, 2007 11
Slide 12: Q4 2006 in Brief
Q4 2006 in Brief • Four customers actively using Enea’s middleware • Several new products released, including Element 2.0 • Solid expansion of software royalties • Strong volumes from marquee customers: Nokia, Sony Ericsson, Agere • Industry recognized leadership in place in Strategy, Marketing, and
Slide 13: Q4 2006 Financials
Q4 2006 Financials • Net sales increased by 5% to MSEK 206 (197) • Operating profit increased by 24% to MSEK 21 (17) • Software sales increased by 1% to MSEK 70 (69) representing 34 (35)% of total sales • Consulting increased by 6% to MSEK 136 (128) Enea Year-End Report 2006, February 6, 2007 13
Slide 14: Full Year 2006 Financials
Full Year 2006 Financials • Net sales increased by 3% to MSEK 750 (726) • Operating profit increased by 20% to MSEK 68 (56) • Software sales increased by 9% to MSEK 271 (250) representing 36 (34)% of total sales • Consulting increased to MSEK 479 (476,5) • Capitalized investments into new Middleware
Slide 15: Enea Group - Net Sales
Enea Group - Net Sales MSEK MSEK 250 750 200 700 150 650 100 600 50 550 0 500 Q1-2005 Q2-2005 Q3-2005 Q4-2005 Q1-2006 Q2-2006 Q3-2006 Q4-2006 Nordic North America EMEAA Rolling 12-months • YTD 3% • YTD 1% • YTD 15% • 4Q06 9% • 4Q06 -18% • 4Q06 20% Enea Year-End Report 2006, February 6, 2007 15
Slide 16: Enea Group - EBIT
Enea Group - EBIT EBIT margin MSEK Percent 22 22 20 20 18 18 16 16 14 14 12 12 10 10 8 8 6 6 4 4 2 2 0 0 -2 Q1-2005 Q2-2005 Q3-2005 Q4-2005 Q1-2006 Q2-2006 Q3-2006 Q4-2006 -2 Nordic North America EMEAA EBIT Margin Enea Year-End Report 2006, February 6, 2007 16
Slide 17: Software Sales
Software Sales MSEK MSEK 80 300 75 260 70 65 220 60 180 55 50 140 45 40 100 Q1-2005 Q2-2005 Q3-2005 Q4-2005 Q1-2006 Q2-2006 Q3-2006 Q4-2006 • YTD 9% Software sales Rolling 12-months • 4Q06 1% Enea Year-End Report 2006, February 6, 2007 17
Slide 18: Sales Distribution Q4 2006
Sales Distribution Q4 2006 EMEAA 7% Others Software 24% 34% North Services America 66% 18% Telecom Infrastr. 41% Nordic 75% Telecom Handsets 35% Enea Year-End Report 2006, February 6, 2007 18
Slide 19: Cash Position
Cash Position MSEK MSEK 180 100 160 90 80 140 70 120 60 100 50 80 40 60 30 40 20 10 20 0 0 -10 2002 2003 2004 2005 2006 -20 -20 -40 -30 -60 Cash and Cash Equivalents Cashflow -40 Enea Year-End Report 2006, February 6, 2007 19
Slide 20: Key Metrics
Key Metrics Metric 2006 (2005) Q406 (Q405) Total revenue per employee, MSEK 1,497 (1,426) 0.402 (0.388) Currency effects, MSEK -5.8 (3.9) -2.9 (0.5) Investments, MSEK 6.0 (11.9) 3.1 (1.3) Capitalized investments, MSEK 33.1 (3.7) 13.6 (2.8) Depreciation, MSEK 9.8 (10.8) 3.2m (2.6m) Cash, MSEK 146.4 (
Slide 21: Way Forward
Way Forward Enea Year-End Report 2006, February 6, 2007 21
Slide 22: The Mobile Revolution Has Only Just Begun
The Mobile Revolution Has Only Just Begun Enea Year-End Report 2006, February 6, 2007 22
Slide 23: Exciting Industry Trends
Exciting Industry Trends • Next generation mobility and convergence driving new services • Rapid emergence of 3rd screen • Unprecedented subscriber growth • Accelerated migration to IP-based network architectures • Emergence of middleware to meet demand for “anywhere anytime” network access Obvious
Slide 24: Convergence is Driving Revenue Opportunities for Carriers
Convergence is Driving Revenue Opportunities for Carriers “Everything networks. People and devices , music, video games, content, data and services” - Howard Stringer, CEO Sony Enea Year-End Report 2006, February 6, 2007 24
Slide 25: Significant Expenditures in Convergence Technology
Significant Expenditures in Convergence Technology 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 2007 2008 2009 2010 2011 Global Carrier IMS Capex, USD Billion Source: ABI Research Enea Year-End Report 2006, February 6, 2007 25
Slide 26: Market Challenges
Market Challenges Enable high-availability Buy-out Ensure scalability Reduce time-to-market Royalty Reduce development costs Reduce device costs Rental Reduce R&D effort “Free”, Loss-leader Reduce cost of ownership Enea Year-End Report 2006, February 6, 2007 26
Slide 27: Enea's Response
Enea’s Response • Traditional product portfolio – RTOS, data management, middleware, tools, services – Market growth rate: 10 % – Competitive landscape: • Wind River, Green Hills, Mentor Graphics, Linux • Convergence solutions – New platforms to address market demands – Market growth rate: double di
Slide 28: Our Goal: Building Software Platforms that Span
Our Goal: Building Software Platforms that Span Our goal is to span multiple product segments across network infrastructure and mobile handsets Enea Year-End Report 2006, February 6, 2007 28
Slide 29: Our Strategy
Our Strategy • Expand with vertically integrated solutions positioned towards the convergence market • Provide off-the-shelf software foundations that enable development of high availability applications, accelerate software development and reduce cost • Integrate new and existing solutions leveragi
Slide 30: Our Momentum in Convergence Market
Our Momentum in Convergence Market • Leading Silicon Valley MobileTV provider purchased Element middleware. • Order size: USD 850 000 • Customer is in convergence sweet spot – delivering television, film and music content across the mobile and personal computing markets • Enea’s solution enables foc
Slide 31: Summary
Summary • Enea well positioned for growth in Mobility and Network convergence • We are in an exciting, rapidly evolving marketplace • Enea has the resources and the ambition to actively take part in the development and potential consolidation of the market Enea Year-End Report 2006, February 6, 2007
Slide 32: Thanks
Thanks For further information, please contact: Johan Wall, +46 8 507 140 00, johan.wall@enea.com Håkan Gustavson, +46 8 5071 4000, hakan.gustavson@enea.com Enea, OSE, OSEck, OSE epsilon, Element, Polyhedra, Optima, LINX and Device Software Optimized are all registrated trademarks by Enea AB or its