Ascom Holding Ag · SIX:ASCN
Ascom — Investor Presentation (September 2004)
82 slides from Ascom's investor presentation, Sep 24, 2004
Slide 1: Analyst and Investor meeting
Analyst and Investor meeting Berne, 24 September 2004
Slide 2: Presentation overview
Presentation overview Agenda Speaker Position 1. Introduction Rudolf Hadorn Chief Executive Officer 2. Financial results H1 2004 Thomas Casata Chief Financial Officer 3. Divisional presentations Introduction Rudolf Hadorn Chief Executive Officer Wireless Solutions (WS) Daniel Roth Head of Wireless S
Slide 3: 1. Introduction
1. Introduction Rudolf Hadorn Chief Executive Officer 2
Slide 4: Topics of today
Topics of today z Review of key achievements in H1 2004 z Review of H1 2004 financial performance z Overview of our future structure and new strategic direction z Divisional presentations - Wireless Solutions - Security Solutions (including Carrier Products) 3
Slide 5: Ascom Group – Key goals in 2004
Ascom Group – Key goals in 2004 Organic, Profit profitable NWC Improvement Keep full Growth focus Cost Net Income optimisation Break even Further Tax structure Simplification improvement of legal structure Manufacturing Solve Restructuring/ US Tax case Co-operation 4
Slide 6: Ascom Group Key achievements in H1 2004 1/2
Ascom Group Key achievements in H1 2004 1/2 Financial performance turned around z Stable topline versus H1 03 z Very strong gross and operating margin improvement – improved from 22% to 29% and from (3)% to 7%, respectively z Ascom ‘back to black’ with Net Income of CHF22m (improved from CHF(57)m in
Slide 7: Ascom Group Key achievements in H1 2004 2/2
Ascom Group Key achievements in H1 2004 2/2 Further de-risked and improved the company z US Tax case favourably resolved z Manufacturing France (Plant HPF) sold to new industrial owner z Manufacturing Switzerland sales agreement signed, closing done in August z Cost reduction programmes on track z L
Slide 8: The future structure of Ascom
The future structure of Ascom The future structure of Wireless Security Co-operation Ascom will be a Solutions Solutions(1) more attractive (WS) (SeSo) Network Integration Transport proposition as (NI) Revenue (TR) we focus on Wireless and Others Security Strategy Strategy Solutions and position z A
Slide 9: 2. Financial results H1 2004
2. Financial results H1 2004 Thomas Casata Chief Financial Officer 8
Slide 10: Improved margins
Improved margins Profit and loss statement (IFRS) (CHF million) H1 2004 FY2003 H2 2003 H1 2003 ∆ H1 Incoming orders 587 1,619 676 943 (356) Net revenue 596 1,515 682 833 (237) Gross profit 175 341 156 185 (10) Gross margin 29% 23% 23% 22% 7% Functional cost (136) (368) (158) (210) 74 Operating profi
Slide 11: Turnaround completed
Turnaround completed Profit and loss statement (IFRS) (CHF million) H1 2004 FY2003 H2 2003 H1 2003 ∆ H1 EBIT 30 (45) 0 (45) 75 Net financial (expenses)/income (5) (13) (5) (8) 3 Income taxes (3) (10) (6) (4) 1 Net income 22 (68) (11) (57) 79 Memo: EBITDA 51 33 36 (3) 54 EPS (CHF) 0.62 (2.50) (2.50)(
Slide 12: Balance sheet more robust
Balance sheet more robust Balance sheet (IFRS) 30 June 2004 31 Dec 2003 30 June 2003 (CHFm) (%) (CHFm) (%) (CHFm) (%) Fixed assets 186 19 223 20 300 24 Cash + securities 331 34 321 29 250 20 Inventories 143 15 147 13 235 19 Other current assets 318 32 417 38 465 37 Total assets 978 100 1,108 100 1,2
Slide 13: Net cash
Net cash position further strengthened 150 (CHF million) H1 04 FY 03 H1 03 Bond (200) (200) (200) 100 87 55 Debt (36) (56) (238) 50 Mortgages (2) (3) (11) Net cash (CHFm) 0 Other debt (5) (7) (7) Jun-03 Dec-03 Jun-04 (50) Gross debt (244) (266) (456) Cash 306 306 247 (100) Securities 25 15 3 (150) N
Slide 14: Strong profitability improvement
Strong profitability improvement Profit and loss existing core business segments H1 2004 Wireless Security Network Transport Total (CHF million) Solutions Solutions Integration Revenue core Incoming orders 144 92 146 102 479 Net revenue 133 83 141 133 485 Gross profit 65 25 37 34 159 margin 49% 31%
Slide 15: Wireless Solutions – Improved margins
Wireless Solutions – Improved margins (CHF million) H1 2004 FY2003 H2 2003 H1 2003 ∆ H1 Incoming orders 144 277 141 136 8 Net revenue 133 276 145 131 2 Gross margin 49% 46% 46% 45% 4% Operating profit 19 33 18 15 4 OP margin 14% 12% 12% 11% 3% R&D 10 19 8 11 (1) Employees 1,112 1,142 1,142 1,127 (15
Slide 16: Security Solutions – Going international
Security Solutions – Going international (CHF million) H1 2004 FY2003 H2 2003 H1 2003 ∆ H1 Incoming orders 92 236 89 147 (55) Net revenue 83 179 88 91 (8) Gross margin 31% 28% 25% 31% - Operating profit 4 13 5 8 (4) OP margin 5% 7% 6% 9% (4)% R&D 2 5 2 3 (1) Employees 685 636 636 657 28 Note: 2003 r
Slide 17: Pro forma financials – core Ascom
Pro forma financials – core Ascom Based on H1 2004 Wireless Security Group (CHF million) Solutions Solutions(2) activities Sum(1) Incoming orders 144 124 3 271 Net revenue 133 117 3 253 Gross profit 65 38 2 105 margin 49% 32% n/m 41% Operating profit 19 9 (10) 18 margin 14% 8% n/m 7% Employees 1,112
Slide 18: Outlook 2004
Outlook 2004 z Growth: – Current core Ascom segments: confirmed 4-5% organic for 2005, 2004 slightly below – Co-op: stable – Measures to create faster organic growth z Operating Profit: – Current core Ascom segments: 7-8% in H2 2004 – Co-op: around breakeven z Positive operating cash flow 17
Slide 19: 3. Divisional presentations
3. Divisional presentations Rudolf Hadorn Chief Executive Officer 18
Slide 20: Why concentrate on Wireless Solutions and Security Solutions?
Why concentrate on Wireless Solutions and Security Solutions? Focusing on z The businesses define our core competencies and are mutually compatible, Wireless and offering superior services and solutions to our customers, mainly in the Security Healthcare and Security market segments Solutions – z Gr
Slide 21: Development of the focused Ascom
Development of the focused Ascom We are further YoY organic revenue growth (g) g = 5%++ focusing the Operating margin (m) m = 10%++ company in order to deliver Strategic, value significant g = c. 5% enhancing acquisitions growth and m = c. 10% Increased awareness of our margin products and solut
Slide 22: Wireless Solutions Division
Wireless Solutions Division Daniel Roth Head of Wireless Solutions Stefan Brämberg VP R&D, Wireless Solutions 21
Slide 23: Wireless Solutions Division – General Overview
Wireless Solutions Division General Overview Daniel Roth Head of Wireless Solutions 22
Slide 24: Wireless Solutions – In brief
Wireless Solutions – In brief We distinguish z European leader in the provision of wireless solutions and services, with a clear focus on ourselves from attractive verticals (healthcare, elderly care, industry, secure establishments, hotels and our competitors retail) by creating z Formed in 1955 as
Slide 25: Hospital
Hospital Reduces response times and improves patient services Customer benefits “Our hospital porters’ Hospital z Improves operational availability for effectiveness and process tasks increased by some 60% ’turnaround’ times upon adoption of z Quicker response to critical Ascom’s information system”
Slide 26: Typical Hospital solution
Typical Hospital solution Aker University Hospital in Oslo z Multi-site and multi-discipline University Hospital (>600 beds) with extended diagnostics capabilities (X-Ray, CT, Labs etc), an emergency department and teaching facilities Customer history z Customer first adopted our paging system in 19
Slide 27: Elderly Care
Elderly Care Quicker response to resident calls “Ascom’s Customer benefits solutions bring peace of mind to Elderly Care z Increases safety and security our residents, for residents who feel more safe and secure z Improves staff efficiency, thus in the knowledge improving quality of service that hel
Slide 28: Typical Elderly Care solution
Typical Elderly Care solution Henry und Emma Budge Stiftung (Germany) z 330 bedroom elderly care home with extended 24 hour service capabilities Our Delivery z Integrated wireless system with full site coverage - staff presence monitor - teleCARE-M nurse call system in every room (wireless call butt
Slide 29: Industry
Industry Quicker response to production disturbances Customer benefits “Factory machine Industry downtime was z Creates a more agile and significantly customer oriented organisation reduced – we z Increases on-site security achieved our ROI within 9 z Reduces production losses months” z Reduces down
Slide 30: Typical Industry solution
Typical Industry solution Unilever Best Foods (Sweden) z Food production division with 1,000 employees, of which c. 300-400 are ‘mobile’ on the production floor z Highly automated processes sensitive to environmental influences (e.g. temperature) requiring central monitoring via SCADA and incorporat
Slide 31: Geographic presence
Geographic presence Wireless Solutions has operations in 9 European Direct Countries, and presence we are also Indirect expanding our Ascom presence in the companies fast growing US market. We also Main markets(1) – 2004E (CHFm) sell through over Europe US 15 indirect sales Market size 1,500 190 cha
Slide 32: Wireless Solutions – Revenue breakdown
Wireless Solutions – Revenue breakdown CHF133m revenue H1 2004 Due to our Segment split Geographic split strong service offering and OEM Other distribution Other 14% Sweden* 19% platform, we 22% Germany 24% 3% have a broad distribution of Belgium 4% revenues across Secure our main 4% US verticals an
Slide 33: Solutions, Technology and Product overview
Wireless Solutions Division Solutions, Technology and Product overview Stefan Bramberg VP R&D, Wireless Solutions 32
Slide 34: R&D strategic focus
R&D strategic focus z Develop products for our target segments using the most suitable and stable technologies z Generate unique “hard to copy” products, tailor made for our differentiated customer groups z Support the “smart integration” concept and protect customers’ investments (backwards and for
Slide 35: Wireless technologies for enterprise use
Wireless technologies for enterprise use Interface Own PMR Wide area development TETRA Paging GSM/3G On-site Paging Blue Tooth WLAN DECT 34
Slide 36: Technical protocol evolution
Technical protocol evolution With the OFDM a,c,d,g,h,i,e impending increase in adoption of IEEE 802.11 DSSS b,c,d,i,e WLAN technology FHSS looming, the wireless Hiperlan2 telephony space is likely to UPCS/PWT experience DECT accelerated CT3 growth over the coming years CT2 CT1 91 92 93 94 95 96 97 9
Slide 37: Evolution of technology in our market
Evolution of technology in our market 100% Although the WLAN DECT WLAN market is On site very embryonic Messaging OSP at present, our superior 100% WLAN offerings see us On site GSM/3G extremely well Voice mobility DECT positioned to lead this migration and 100% IP Nurse call Healthcare capitalise o
Slide 38: Key products and customised solutions
Key products and customised solutions On-site paging Personal security A system for text messaging as well as A personal security system using traditional paging. The messaging messaging for calling assistance. The function is made more efficient by system is based on a variety of alarm integration
Slide 39: Key products and customised solutions (continued)
Key products and customised solutions (continued) Cordless telephony Nurse call A telephone system providing user A free topology networked based mobility to any PBX as well as it offering healthcare system. It is modular, flexible all the advantages of the on-site paging and scalable for basic to h
Slide 40: Linking the value-chain
The ‘smart integration’ concept Ascom Wireless HIS Personal Alarm RIS Network Management Solutions helps its Database Enterprise customers to link LAN E-mail SCADA PLC the end user to the complete Linux based IP platform Linking the value-chain Linking the value-chain enterprise Web Mail Contacts Se
Slide 41: Wireless Solutions Division – Market overview
Wireless Solutions Division Market overview Daniel Roth Head of Wireless Solutions 40
Slide 42: Overview of our core market
Overview of our core market (Healthcare, elderly care, industry, secure establishments) Our core market Our core market(1) (Europe) is forecast to grow by 5% over 1,200 the coming 1,150 = 5% AG R years. Given the 1,100 ’09 C ’04 – more proven and 1,050 robust nature of 1,000 (CHFm) our business 950
Slide 43: Competitive positioning in core market
Competitive positioning in core market With market Total core European market Total core European market - segments shares of 16% Secure across our major establishments verticals, and 4% Health- care dominant Ascom 31% positions in 16% Industry some of our key 35% geographies, we are amongst the Oth
Slide 44: Competitive landscape
Competitive landscape Ascom competitive advantage Our model of Mobile platforms ‘smart z Customised solutions integration’ z Unique and robust design features allows us to Vocera z Modularity of solutions and products differentiate ourselves from the competition System Integrators z Deep understandi
Slide 45: Main competitors by country and vertical
Main competitors by country and vertical On a country-by- Hospital Elderly care Industry country basis, Austria Schrack Tenovis Siemens, Ericson our market is Belgium Televic Televic Siemens, Ericsson, Alcatel Denmark Best, Jenka Jenka, Faci, Condigi Cisco, Siemens, GSM very fragmented Sondi, Jenka,
Slide 46: Prospects for Wireless Solutions
Wireless Solutions Division Prospects for Wireless Solutions Daniel Roth Head of Wireless Solutions 45
Slide 47: Business strategy
Business strategy With a strong z Penetrate key markets with superior growth and profit potential (e.g. US) platform and complete z Transfer solutions and best practices across geographies offering, Wireless z Leverage our existing client base to generate additional revenue Solutions is well z Lever
Slide 48: Wireless Solutions Division – Questions and Answers
Wireless Solutions Division Questions and Answers 47
Slide 49: Security Solutions Division – General overview
Security Solutions Division General overview Urs Ramseier Head of Security Solutions 48
Slide 50: Security Solutions – In brief
Security Solutions – In brief We are a general z European leader in designing, implementing, maintaining and operating customised contractor, communications, management and information solutions in order to support our customers’ system integrator, security related business and infrastructure proces
Slide 51: Securing our customers’ infrastructure
Securing our customers’ infrastructure Our solutions Defence Traffic Security enable our customers to z Army z Railway operators efficiently z Civil protection z Motorway operators manage their z Airports infrastructure z Coach industries and operations, even in the most demanding Public Safety envi
Slide 52: Summary business offering
Summary business offering By employing a project based Ascom Security Solutions approach, we z Communication and command Defence are able to systems adapt our z Information and management solutions for our systems Public Safety core verticals, z Secure voice and data transmission as well as being z
Slide 53: Security Solutions – Revenue breakdown
Security Solutions – Revenue breakdown CHF83m revenue H1 2004 In three years we Segment split Geographic split have transformed from a company Systems & Finland Other where 90% of Solutions 4% 3% our revenues 9% Traffic Germany 10% were from the 27% Public Swiss defence safety business, into a 15% f
Slide 54: Security Solutions – business model
Security Solutions – business model Our systems and Government and Private Businesses solutions provide Traffic Infrastructure the complete Defence (D) Public Safety (PS) Operators (T) platform to enable our Solutions Design customers to Security Solutions Industrialisation/ manage their Technology
Slide 55: Ascom Products & Systems
Ascom Products & Systems By virtue of our ● Tele Service Applications continued openTAS ● Web-based, not tied to any particular terminal or communication network development of leading systems ● Network and end-user access device based on COTS philosophy (Computer Off and solutions, Greenbox The She
Slide 56: Typical Customer Projects
Security Solutions Division Typical Customer Projects Nicolas Mueller Traffic Security Urs Waldner Public Safety 55
Slide 57: Swiss Railway – vehicle communication platform
Swiss Railway – vehicle communication platform Nicolas Mueller Traffic Security 56
Slide 58: Real–time passenger information
Real–time passenger information German Our PIS is a Mobile complete end- English Stations to-end solution, operating in a Passenger Information real-time Systems (PIS) today environment for z timetable based both stationary …but tomorrow they will also and mobile account for … our PIS provides fully
Slide 59: Vehicle platform – a case study
Vehicle platform – a case study Swiss Railways (SBB) Our complete solution z In response to complaints about crime on trains and insufficient levels of provided SBB passenger information at unplanned events, SBB came to us for a solution …. with the answer to all of their …and we provided them with
Slide 60: Vehicle platform set–up
Vehicle platform set–up Central vehicle platform z openTAS z web-based technology Distributed vehicle platform z RAILVOX z 1000-fold in operation Europe-wide 59
Slide 61: Customer Information System
Customer Information System z Swiss Railway ordered from Softlab who subcontracted Ascom for real-time stationary Customer Information System Data based on ... z prognosis system ProSurf z traffic management system ILTIS 3 step realisation z pilot train station Aarburg Oftringen May 04 z zug main st
Slide 62: Customer Information System set-up
Customer Information System set-up Train platform Train platform mobile and on board passenger Passenger information information 61
Slide 63: London Underground – help points
London Underground – help points Urs Waldner Public Safety 62
Slide 64: London Underground
London Underground − 275 stations − 415km of track − 2.8 million passenger journeys daily 63
Slide 65: Emergency call system for London “Tube Lines”
Emergency call system for London “Tube Lines” London Underground modernisation programme z Call system for 11 tube stations – help point system based on NIS 2000 platform z Ascom as main contractor – planning − engineering – production − delivery and start-up – documentation and training z Partnersh
Slide 66: What is the ‘Help Point System’?
What is the ‘Help Point System’? Enables tube passengers Ascom’s ‘Help Point System’ z to contact control room operator – for information and emergency assistance at any time z to feel safer underground Help Point z Simple three button passenger operation – Fire Alarm, Emergency, Information z Monit
Slide 67: System set–up NIS 2000
System set–up z Help Points CCTV Monitor z NIS 2000 Exchange SBA z Control Station (HCI) DVR z Backup Phone (SBA) – HCI interface NIS 2000 HCI – Diversion to BT DVA Police PA – Audio to DVR PABX – Clock LUL Telephone network Synchronisation – DVA / PA BT Police – CCTV CCTV Matrix 66
Slide 68: Security Solutions Division – Market Overview
Security Solutions Division Market Overview Urs Ramseier Head of Security Solutions 67
Slide 69: European Security Solutions market
European Security Solutions market Promising opportunities in European Security Solutions market(1) international public = 3.3% safety ‘03 – ‘07 CAGR communication 3,185 2,850 2,905 3,010 3,000 2,650 2,800 Ascom should 2,500 450 570 4.4%(2) 480 470 420 2,500 500 demonstrate 450 (CHFm) 2,000 growth a
Slide 70: Drivers of the Security Solutions market
Drivers of the Security Solutions market Ascom Security Drivers Result Solutions is Larger providers will leverage their ‘complete’ uniquely Need for security will increase solutions in order to further penetrate existing – “Homeland Security” positioned to clients and acquire new ones capitalise on
Slide 71: Competitive landscape
Competitive landscape Ascom competitive advantage With a flexible Broad Industrial players approach to z Customised solutions systems and z Local platform with enterprise capability solutions, our business model Specialist niche players z Durability of offering allows us to z Vendor agnostic compete
Slide 72: Prospects for Security Solutions
Security Solutions Division Prospects for Security Solutions Urs Ramseier Head of Security Solutions 71
Slide 73: Business Strategy
Business Strategy We have four 1. Generate growth through strategic projects in existing and new areas and key areas of geographies, primarily for public safety strategic focus – excellent opportunities in pipeline which will consolidate our 2. Migrate solutions and services across geographies leadi
Slide 74: Carrier Products
Security Solutions Division Carrier Products Beat Gerber Head of Carrier Products 73
Slide 75: Carrier Products – In brief
Carrier Products – In brief QVoice is a z With our ‘All-In-One’ solution, QVoice, we are the market leading provider of solution mobile network testing systems and solutions to the telecoms industry by: designed to – specialising in benchmarking and optimisation for voice and data networks for GSM,
Slide 76: QVoice Measurement Tool
QVoice Measurement Tool z Up to 8 networks per unit simultaneously z GSM, WCDMA, GPRS technologies z Speech testing z Data testing z E-Mail testing z SMS and MMS testing z Video & Multimedia testing z For Drive & Walk Test 75
Slide 77: QVoice Presentation Software
QVoice Presentation Software z Powerful Post Processing for Analysis and Reporting QVP Client QVP Server z Administrator z Network Analyser z Map z Report z Live recording z Expert System 76
Slide 78: Market opportunity
Market opportunity z Multimedia-enriched services will drive usage, operator revenue and bandwidth consumption in mobile networks z End-users are likely to have great expectations since they must pay for these new services z Quality of Service & Optimisation will be very important in the wireless In
Slide 79: Security Solutions Division – Questions and Answers
Security Solutions Division Questions and Answers 78
Slide 80: Investment Highlights
Investment Highlights Rudolf Hadorn Chief Executive Officer 79
Slide 81: Investment highlights
Investment highlights z Foremost provider of mission–critical communications systems and solutions with a leading position in Europe z Ascom will concentrate on two business sectors with faster profitable organic growth. Value enhancing acquisitions possible z Capitalise on increased levels of aware
Slide 82: Analyst and Investor meeting
Analyst and Investor meeting Berne, 24 September 2004 81
Ascom Holding — Investor Presentation (September 2004) on 6ix