Ascom Holding Ag · SIX:ASCN

Ascom — FY2011 Earnings Presentation

53 slides from Ascom's earnings presentation, Mar 15, 2012

  1. Slide 1: Welcome to the Ascom Media & Analyst Conference 2011 Full-Year Results

    WELCOME TO THE ASCOM MEDIA & ANALYST CONFERENCE 2011 FULL -YEAR RESULTS

  2. Slide 2: 2011 Full-Year Results Presenters

    [ ] 2011 FULL-YEAR RESULTS FRITZ MUMENTHALER, CEO MARTIN ZWYSSIG, CFO CLAES ÖDMAN, GM WIRELESS SOLUTIONS RIKARD LUNDQVIST, GM NETWORK TESTING 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 2

  3. Slide 3: Key Messages

    KEY MESSAGES  Ascom Group 2011: Solid results in a challenging business environment – stable revenue in local currencies with a good EBITDA-margin of 13.7%.  Wireless Solutions: excellent results confirm the continuous positive development. Upper limit of the mid term EBITDA target reached earlier

  4. Slide 4: Agenda

    [ ] AGENDA  2011 RESULTS AT A GLANCE  OPERATIONAL FOCUS  2011 FINANCIAL RESULTS  HIGHLIGHTS FROM THE DIVISIONS  OUTLOOK AND STRATEGIC FOCUS 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 4

  5. Slide 5: 2011 Results at a Glance

    [ ] 2011 RESULTS AT A GLANCE 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 5

  6. Slide 6: Topline - Stable Development in 2011

    TOPLINE - STABLE DEVELOPMENT IN 2011 Slight increase of 1.1% for continuing operations  Total revenue of CHF 437.5m (FY 2010: CHF 472.9m) strong impact of negative currency translation effects slight increase of about 1.1% in local currencies  Wireless Solutions: Growth of 6.8% in local currencies

  7. Slide 7: Profitability – Good EBITDA Margin of 13.7%

    PROFITABILITY – GOOD EBITDA MARGIN OF 13.7% EBITDA margin at good level of 13.7% despite negative currency effects  EBITDA: CHF 59.8m  EBITDA margin: 13.7%  EBITDA guidance of 13–14% fulfilled Net profit – continuing business in line with prior year  Group profit: CHF 23.1m (2010: CHF 32.5m)  N

  8. Slide 8: Very Strong Result for Wireless Solutions; Network Testing Hit by Market

     VERY STRONG RESULT FOR WIRELESS SOLUTIONS  NETWORK TESTING HIT BY MARKET DEVELOPMENT Wireless Solutions: outstanding result and beyond expectations  Revenue growth of 6.8% (in local currencies)  Improvement of the gross margin by 2.3 percentage points to 51.3%  EBITDA increased to CHF 41.5m (2

  9. Slide 9: Divestment Security Communication: Close to Complete

    DIVESTMENT SECURITY COMMUNICATION: CLOSE TO COMPLETE  Ascom Czech Republic  MBO (closed on 10 October 2011)  Divisional structure dissolved as of end of 2011  Defense  Ruag (signed on 29 February 2012)  Ascom Austria  MBO (signed on 12 March 2012)  Infrastructure Operators  Trans Data Manag

  10. Slide 10: Shareholders – Tax Free Distribution of CHF 0.25 per Share

    SHAREHOLDERS – TAX FREE DISTRIBUTION OF CHF 0.25 PER SHARE OUT OF CAPITAL CONTRIBUTION RESERVES Proposal to the Annual General Meeting of 18 April 2012:  Distribution of CHF 0.25 per share out of reserves from capital contributions  Total distribution of CHF 9m corresponding to a pay-out ratio of

  11. Slide 11: Operational Focus

    [ ] OPERATIONAL FOCUS  NETWORK TESTING 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 11

  12. Slide 12: Network Testing – 2011 Results

    NETWORK TESTING – 2011 RESULTS Weak demand in Q4 – in line with restrained spending of telco operators  On a global level mobile telco operators reduced expenses and delayed investments mainly in November and December.  As a result demand declined unexpectedly.  Traditionally strong November and

  13. Slide 13: 4G Is Under Way, But Roll-out Slower Than Expected

    4G IS UNDER WAY, BUT PACE OF ROLL-OUT SLOWER THAN ORIGINALLY EXPECTED* Over the last year 4G moved from a promise to a reality, with spectrum already assigned in several countries and the first networks already rolled out commercially in 2011. Based on recent company actions, there’s little doubt th

  14. Slide 14: 4G/LTE Investments to Grow But at a Slower Pace

    4G/LTE INVESTMENTS TO GROW BUT AT A SLOWER PACE Overall, 4G/LTE investments are expected to grow at 79% CAGR between 2011 and 2014, even though the pace has slowed down in most geographies from what was projected 3 years ago APAC NA CALA 2009 USD billions projection WE MEA '09 Gartner forecast 8.7 7

  15. Slide 15: Investment Capacities of Carriers Determine LTE Roll-outs

    INVESTMENT CAPACITIES OF CARRIERS DETERMINE LTE ROLL-OUTS  Demand for mobile broadband continues to grow fast.  General revenue stagnation of carriers – the next wave of telco’s growth is not in the horizon yet.  Large CapEx requirements in the near future – 3G in emerging markets, 4G in mature o

  16. Slide 16: Total Market Expected to Grow Moderately

    TOTAL MARKET EXPECTED TO GROW MODERATELY Overall, the total market across all segments we operate in is expected to grow 5% in 2012. Total market projection +5% p.a. CHFm ~560 ~530 Post-processing 100-120 95-115 Benchmarking 65-75 65-75 150-190 Optimization 160-200 Roll-out 160-190 180-210 2011 2012

  17. Slide 17: Network Testing - Top Line Initiatives

    NETWORK TESTING - TOP LINES INITIATIVES Focus on growing market segments and on parts of the market where our position is under-represented. Focus post- ▪ We have a strong product portfolio in post-processing now, with the acquisition of processing Veelong (January 2012). ▪ There is considerable roo

  18. Slide 18: Network Testing – Profitability Improvements

    NETWORK TESTING – PROFITABILITY IMPROVEMENTS Primary focus is to adapt the NT cost structure to the current realties with the target to re-establish the profitability level. Restructuring will lead to reduction of cost run rate in the order of magnitude of CHF 10m p.a.  Restructuring and reorgani

  19. Slide 19: 2011 Full-Year Financial Results

    [ ] 2011 FULL-YEAR FINANCIAL RESULTS DR. MARTIN ZWYSSIG 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 19

  20. Slide 20: Current Reporting Structure

    CURRENT REPORTING STRUCTURE Ascom Wireless Network Discontinued Real Estate Corporate Solutions Testing Operations sold FAM Defense Real Estate Civil Security signed InOp signed Austria sold Czech Rep. 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 20

  21. Slide 21: Consolidated Income Statement

    CONSOLIDATED INCOME STATEMENT CHFm 2010 2010 FX-adj. 2011 Revenue 472.9 432.2 437.5 Gross profit 244.8 218.9 Gross margin 51.8% 50.0% Total functional costs (189.1) (179.3) Amortization of intangible assets from acquisition (10.5) (9.4) Other income/(expenses), net 6.2 10.4 EBIT 51.4 48.1 40.6 Net f

  22. Slide 22: Growth Analysis

    GROWTH ANALYSIS Actual Organic FX Acquisition/ Actual Δ 2011/2010 2010 growth translation divestment 2011 (in %) (in %) (in %) (in CHFm) Wireless 282.9 5.1% -9.0% 4.7 276.6 -2.2% Solutions Network Testing 168.5 -6.9% -9.0% -2.7 138.9 -17.6% Real Estate 22.4 0.8% -0.7% n/a 22.4 0.1% Total Ascom 472.9

  23. Slide 23: Revenue Split per Region

    REVENUE SPLIT PER REGION (in %) 2% 11% 7% 7% 11% Wireless Solutions 17% Switzerland 80% Europe & Africa Americas 4% Asia/Pacific 19% Network Testing 46% 65% 31% 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 23

  24. Slide 24: Functional Costs Development

    FUNCTIONAL COSTS DEVELOPMENT (in mCHF) 195 190 185 189.1 180 (14.2) 0.9 (1.2) 175 4.7 179.3 170 174.9 165 Total 2010 FX-adj. 2010 FX-adj. Marketing & Research & Administration Total 2011 Distribution Development 195 190 185 189.1 180 (14.2) (2.9) 7.0 0.3 175 179.3 170 174.9 165 Total 2010 FX-adj. 20

  25. Slide 25: Consolidated Balance Sheet

    CONSOLIDATED BALANCE SHEET 31.12.2010 31.12.2011 CHFm % CHFm % Intangible assets 221.5 38.1 215.0 42.4 Other non-current assets 39.9 6.9 40.8 8.1 Non-current assets 261.4 45.0 255.8 50.5 Cash and cash equivalents 129.0 22.2 73.3 14.4 Other current assets of continuing operations 189.9 32.8 164.5 32.

  26. Slide 26: Development of the Shareholders' Equity

    DEVELOPMENT OF THE SHAREHOLDERS‘ EQUITY (in CHFm) 215.0 210.0 23.1 -8.6 205.0 0.3 203.8 200.0 195.0 190.0 189.0 185.0 180.0 175.0 Balance at Group profit for Dividend paid Other items Balance at 1.1.2011 the period 31.12.2011 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF IN

  27. Slide 27: Consolidated Statement of Cash Flows

    CONSOLIDATED STATEMENT OF CASH FLOWS CHFm 2010 2011 Net cash flow from operating activities 46.2 16.4 Net cash flow from investing activities (11.4) (4.5) Net cash flow from financing activities (27.2) (66.7) Net increase/(decrease) in cash and cash equivalents 1.3 (55.7) Cash and cash equivalents a

  28. Slide 28: Highlights from the Divisions

    [ ] HIGHLIGHTS FROM THE DIVISIONS 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 28

  29. Slide 29: Wireless Solutions

    [ ] WIRELESS SOLUTIONS CLAES ÖDMAN www.ascom.com/ws 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 29

  30. Slide 30: Wireless Solutions – Excellent Results in 2011

    WIRELESS SOLUTIONS – EXCELLENT RESULTS IN 2011 Organic growth of 5.1%  Direct channel sales grew in almost all regions in particular in US and Germany.  OEM business continued to develop well. Signing a new OEM agreement in 2011.  Indirect channel with international sales partners developed satis

  31. Slide 31: Wireless Solutions – Achievements and Trends

    WIRELESS SOLUTIONS – ACHIEVEMENTS AND TRENDS Achievements in 2011  Achievement of ISO 13485 certification (ISO standard for the design and manufacture medical devices).  Relevant software cleared for US (FDA) and Europe (MDD).  In December 2011, opening of a test center in Russia as an important

  32. Slide 32: Supporting Nurse Productivity

    SUPPORTING NURSE PRODUCTIVITY MONITOR REPORT ACTIVITY CARE COMMUNICATE 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 32

  33. Slide 33: Ascom Wireless Solutions Portfolio

    ASCOM WIRELESS SOLUTIONS PORTFOLIO 3rd Party Elderly IP-DECT WiFi Paging Nurse Call Devices Care Handsets Handsets Pagers UNITE Clients Nurse Call Care Gateway Base-Stations Alarm-Devices GSM/3G/LTE IP-Nurse Call 3rd party Care IP-DECT Infrastructure WiFi Wireless Phones Gateway Nurse Call Services

  34. Slide 34: Developed Smartphone App

    DEVELOPED SMARTPHONE APP 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 34

  35. Slide 35: Waveforms for Critical Alarms

    WAVEFORMS FOR CRITICAL ALARMS 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 35

  36. Slide 36: Wireless Solutions – Focus Items 2012

    WIRELESS SOLUTIONS – FOCUS ITEMS 2012 1 FURTHER INVESTMENT IN SALES CHANNELS  Further growth in the own channel, particular in North America  Gaining market share in new markets (Middle East, Central & Eastern Europe) 2 PREPARE FOR FURTHER GROWTH  Striving for further organic growth  Growing bus

  37. Slide 37: Network Testing

    [ ] NETWORK TESTING RIKARD LUNDQVIST www.ascom.com/nt 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 37

  38. Slide 38: Network Testing – Challenging Environment in 2011

    NETWORK TESTING – CHALLENGING ENVIRONMENT IN 2011 Markets weaker than expected – slow-down particularly in late 2011  After a strong 2010, North America was negatively affected by cancelled merger of T-Mobile/AT&T late 2011.  EMEA region at stable currency slightly below prior year. European finan

  39. Slide 39: Network Testing – Achievements and Trends

    NETWORK TESTING – ACHIEVEMENTS AND TRENDS Achievements in 2011  Expansion of the LTE offering across the whole product portfolio including launch of new HW platforms (RTU-5, MTP-4) for Benchmarking & Monitoring.  Frost & Sullivan award for market leadership in Test & Measurement.  Strong growth o

  40. Slide 40: Network Testing – Offering

    NETWORK TESTING – OFFERING BENCHMARKING & TEST & MEASUREMENT REPORTING & ANALYSIS MONITORING TEMS Automatic TEMS Discovery TEMS Investigation TEMS Symphony TEMS Pocket TEMS Monitor Master TEMS Visualization 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 40

  41. Slide 41: Network Testing – Focus Items 2012

    NETWORK TESTING – FOCUS ITEMS 2012 1 IMPROVE PROFITABILITY  Cost measures to re-establish profitability level  Expansion of indirect sales channels  Drive TEMS Discovery business 2 LEVERAGE MARKET LEADERSHIP  Provide Solutions that drive operator efficiency and promotes portfolio value  Utilize

  42. Slide 42: Outlook and Strategic Focus

    [ ] OUTLOOK AND STRATEGIC FOCUS  ASCOM 2.0 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 42

  43. Slide 43: Consistent Growth Strategy

    CONSISTENT GROWTH STRATEGY  Ascom will continue to consistently pursue its corporate strategy it adopted in 2004 and concentrate on Mission-Critical Communication in the business-to- business strategy.  Wireless Solutions and Network Testing are both market leaders in their respective markets. Bot

  44. Slide 44: Ascom 2.0 – A Truly International Company

    Göteborg (Wireless Solutions) Reston Dübendorf/Zurich (Network Testing) (Group Headquarters) Ascom headquarters Ascom local presence ASCOM 2.0 – A TRULY INTERNATIONAL COMPANY Presentation Name Month Year, © Ascom CONFIDENTIAL 25 YEARS OF INNOVATION 44

  45. Slide 45: Ascom 2.0 – Six Cornerstones

    ASCOM 2.0 – SIX CORNERSTONES Two globally oriented businesses, targeting selected market 1 segments, both leaders in their markets 2 Software and hardware products, systems, solutions and services 3 Dedicated to innovation, spending more than 10% p.a. on R&D 4 Underlying megatrends support the growt

  46. Slide 46: Acquisition of Miratel

    ACQUISITION OF MIRATEL: ANOTHER STEP TOWARDS GLOBAL MARKET LEADERSHIP IN HEALTHCARE COMMUNICATION  Miratel is the clear market leader in nurse call solutions, communication and personal security systems for hospitals and care facilities in Finland.  Miratel has over 40 years’ experience in nurse c

  47. Slide 47: Acquisition of Veelong Enhances Position in Reporting and Analysis

    ACQUISITION OF VEELONG ENHANCES POSITION IN REPORTING AND ANALYSIS MARKET SEGMENT  Veelong is a premium developer of advanced solutions for post-processing analysis of mobile network testing data.  Five key employees, including the two founders, will join Ascom Network Testing.  The complete inte

  48. Slide 48: Our Management Team

    OUR MANAGEMENT TEAM BOARD OF DIRECTORS CEO Fritz Mumenthaler* General Secretary/Comm Daniel Lack CFO** Human Resources Kurt Renggli Martin Zwyssig* General Counsel Judith Bischof Wireless Solutions Network Testing Claes Ödman* Rikard Lundqvist* * Member of the Executive Board ** The CFO is also resp

  49. Slide 49: Outlook

    OUTLOOK Financial medium-term targets for 2013*: EBITDA margin 14-15% * Outlook assumes a steady economical environment and at least stable currency relations 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 49

  50. Slide 50: Ascom Is Well Positioned to Create Value

    ASCOM IS WELL POSITIONED TO CREATE VALUE  Ascom is well positioned in two global businesses with market leadership and with a clear focus on innovative software and hardware products, systems, solutions and services.  EBITDA margin target for 2013 remains 14-15%.  Solid balance sheet with a stron

  51. Slide 51: Group Contact

    [ ] GROUP CONTACT Ascom Holding AG Investor Relations T +41 31 999 11 11 Stettbachstrasse 6 F +41 44 823 13 21 CH-8600 Dübendorf investor@ascom.com www.ascom.com 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 51

  52. Slide 52: Legal Disclaimer

    LEGAL DISCLAIMER 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 and unknown risks, uncertainties and other factors which may result in a substantial dive

  53. Slide 53: Thank You!

    [ ] THANK YOU! 2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION 53

Ascom Holding — FY2011 Earnings Presentation on 6ix