Ascom Holding Ag · SIX:ASCN
Ascom — FY2002 Earnings Presentation
55 slides from Ascom's earnings presentation, Mar 26, 2003
Slide 1: Annual Media and Analyst Conference
Annual Media and Analyst Conference 26 March 2003
Slide 2: Agenda
Agenda l Welcome and introduction Juhani Anttila, Chairman and CEO l Financial results 2002 Rudolf Hadorn,CFO l Turnaround Transport Revenue Riet Cadonau, President Transport Revenue l Growth in Wireless Solutions Daniel Roth, President Wireless Solutions l Outlook and targets 2003 Juhani Anttila,Ch
Slide 3: Ascom 2002
Ascom 2002 Positive: Negative: l Reduction of net debt l Transport Revenue Switzerland l Wireless Solutions l Energy Systems l Security Solutions l PBX l Network Integration l New Technology l Transport Revenue (USA, l Divestment Process France) l Goodwill impairment l Mailing Systems disposal and l
Slide 4: Ascom 2002
Ascom 2002 l Net revenue MCHF 2.066 reduced by 13%* l Operating loss of MCHF (107) (previous year MCHF (124)) l Net loss of MCHF 281 Mio. (- 29%) l Reduction of net debt to CHF 264 million (- 58 % ) l Financing agreement concluded with the banks until 31.5.2004 (*) Adjusted for divestments and curre
Slide 5: Ascom 2002
Ascom 2002 l Wireless Solutions, Security Solutions and Network Integration - Net revenue: MCHF 797 - Operating profit: MCHF 47 (Improvement of MCHF 62 compared to 2001) l Transport Revenue, PBX, Energy Systems, New Technology - Net revenue: MCHF 827 - Operating profit: MCHF (108) (Worsening of MCHF
Slide 6: Financial results 2002
Financial results 2002 Rudolf Hadorn, CFO 6
Slide 7: Financial results 2002
Financial results 2002 Key financial results for 2002: • Net income: reduced loss by 29% to -281 MCHF* • Net debt reduced by 58% to 264 MCHF* • Balance sheet total reduced by 39% to 1.504 MCHF* *2003: Further improvement on all three categories 7
Slide 8: Profit and loss statement (IAS) 1/2
Profit and loss statement (IAS) 1/2 (MCHF) 2002 2001 ∆ Net revenue 2.066 3.143 (1.077) Cost of goods sold (1.639) (2.453) 814 Gross margin 428 690 (262) Gross margin in % 21% 22% (1%) Functional cost (SG&A) (535) (814) 279 Operating profit (CIII) (107) (124) 17 Other income & deductions (123) (214)
Slide 9: Profit and loss statement (IAS) 2/2
Profit and loss statement (IAS) 2/2 (MCHF) 2002 2001 ∆ EBIT (231) (338) 107 Financial income (expenses) (31) (46) 15 Minority (gains)/losses 3 4 (1) Income taxes (23) (16) (7) Net income after taxes (281) (396) 115 Memo: EBITDA (42) (110) 68 9
Slide 10: Net revenue and operating profit 2001/2002
Net revenue and operating profit 2001/2002 N e t Re v e n u e (M C H F ) 3 '5 0 0 3 '0 0 0 (702) 2 '5 0 0 (1'077) (322) (53) 2 '0 0 0 1 '5 0 0 3'143 1 '0 0 0 2'066 500 0 2001 2002 V a ria n c e D i v e stm e n ts Regular Exchange O p e ra tin g P rofit (M C H F ) 0 (20) (40) (60) (107) (1 2 4 ) (80)
Slide 11: Other income and deduction 2001/2002
Other income and deduction 2001/2002 (MCHF) (123) (30) 7 7 120 (3) (10) (214) Other income Divestment Restruct. Impairment Profit on Amortis. Other Other income and deductions proceeds cost on sale of of intang. and deductions 2001 real estate real estate assets 2002 11
Slide 12: Financial results 2001/2002
Financial results 2001/2002 (MCHF) (31) (46) (15) 28 4 (8) 6 Financial Currency Write down Other Net Net Financial result gains of financial financial interest currency result 2001 ass./invest. expenses expenses loss 2002 12
Slide 13: Special items below operating profit 2002
Special items below operating profit 2002 (MCHF) 2002 Operating profit (107) Net income after taxes (281) Variance (174) 100% Intangible assets write-off (62) Restructuring cost (46) Depreciation on real estate (24) Write off of financial assets (17) Profit on sales of business units 28 Currency inc
Slide 14: Balance Sheet (IAS)
Balance Sheet (IAS) 31.12.2002 31.12.2001 (MCHF) % (MCHF) % Fixed assets 383 25.5 778 31,3 Current assets 1.121 74.5 1.704 68,7 Total assets 1.504 100.0 2.482 100,0 Equity 196 13.0 514 20.7 Minority shares 0 0.0 3 0.1 LT liabilities 387 25.7 500 20.2 ST liabilities 921 61.3 1 .465 59.0 Total liabili
Slide 15: Net debt reduction by 58% to MCHF in 2002
Net debt reduction by 58% to 264 MCHF in 2002 (MCHF) 700 631 600 MCHF 2002 2001 Bond 200.0 200.0 500 Debt 275.5 536.8 Mortages 10.9 21.4 400 Other debt 7.7 27.8 Gross debt 494.1 783.0 Cash (228.3) (150.8) 300 Securities (1,4) (0,9) Net Debt 264.4 631.3 264 200 100 Dez 2001 Apr Jun Sep Dez 2002 15
Slide 16: Cash Flow 2002 and 2001
Cash Flow 2002 and 2001 (MCHF) 2002 2001 Net income (281) (396) Depreciation 205 230 Business divestment (investment) 248 (89) Net working capital reduction 213 49 Restructuring cost (net) 17 43 Taxes paid (32) (21) Net interest paid (30) (33) All other variances 9 70 Cash flow (before financing) 34
Slide 17: Key figures Wireless Solutions
Key figures Wireless Solutions (MCHF) 2002 2001 Order income 228 209 Order backlog 47 41 Net revenue 235 201 Operating profit 25 9 Employees 1.142 1.099 17
Slide 18: Key figures Security Solutions
Key figures Security Solutions (MCHF) 2002 2001 Order income 181 202 Order backlog 77 103 Net revenue 212 239 Operating profit 15 11 Employees 638 580 18
Slide 19: Key figures Network Integration
Key figures Network Integration (MCHF) 2002 2001 Order income 370 460 Order backlog 104 82 Net revenue 350 456 Operating profit 7 (35) Employees 1.016 1.322 19
Slide 20: Key figures Transport Revenue
Key figures Transport Revenue (MCHF) 2002 2001 Order income 225 345 Order backlog 244 338 Net revenue 283 327 Operating profit (28) (22) Employees 842 853 20
Slide 21: Key figures PBX
Key figures PBX (MCHF) 2002 2001 Order income 153 197 Order backlog 15 21 Net revenue 162 195 Operating profit (27) (17) Employees 555 669 21
Slide 22: Key figures Energy Systems
Key figures Energy Systems (MCHF) 2002 2001 Order income 345 480 Order backlog 52 77 Net revenue 371 577 Operating profit (25) (17) Employees 1.231 1.397 22
Slide 23: Key figures New Technologies (PLC and iT_SEC)
Key figures New Technologies (PLC and iT_SEC) (MCHF) 2002 2001 Order income 25 78 Order backlog 3 51 Net revenue 11 36 Operating profit (28) (37) Employees 58 131 23
Slide 24: Ascom Holding AG equity development 2001/2002
Ascom Holding AG equity development 2001/2002 (MCHF) * issue of 725.1 CO is addressed by offsetting the loss carry forward with the legal 504 reserves, based on a proposition of the Board * * Threshold for 725.1 CO to Legal Res. Net Loss 2002 initiate restructuring proposals at 50% of share capital
Slide 25: Ascom 2002/2003 key focus areas for improvement
Ascom 2002/2003 key focus areas for improvement Operating improvements PLC TR AES PBX loss reduction/ transformed loss reduction turnaround divestment Non-operating improvements Debt reduction Optimisation Treasury thru divestment of group optimisation & NWC reduction tax structure 25
Slide 26: Ascom Transport Revenue: Turnaround
Ascom Transport Revenue: Turnaround Riet Cadonau, President of the Division Transport Revenue 26
Slide 27: Transport Revenue: Achieving the turnaround
Transport Revenue Achieving the turnaround l The offering l The major issues l The achievements l The committed turnaround 27
Slide 28: Transport Revenue In brief
Transport Revenue In brief Segments l Fare collection systems l Parking collection systems l Road toll collection systems Revenue l ~ 290 CHFm in 2002 Employees l ~ 900 worldwide 28
Slide 29: Transport Revenue Worldwide presence
Transport Revenue Worldwide presence Subsidiaries in l Gümligen (CH) l Valence (F) l Paris (F) l Atlanta (USA) Local offices in USA, UK, Hong Kong, China, Spain, Chile and Italy Customers: 29
Slide 30: The offering Fare Collection
Transport Revenue The offering Fare Collection l Ticket Vending Machines (TVM) l Sales terminals / Access control systems l Networked management systems l Outstanding installed base worldwide as basis for retrofits and services l Worldwide # 2 Customers worldwide / installed base l 1000 train / metr
Slide 31: The offering Parking
Transport Revenue The offering Parking l Parking equipment (gates, ticket dispensers, cashier machines, payment terminals, etc.) l PC based, scalable and secure management software l Innovative solutions including licence plate recognition and reservation by Internet l # 1 in US airport-parking syst
Slide 32: The offering Toll
Transport Revenue The offering Toll l Highways, bridges and tunnels l 'MultiToll' management system l Free flow (vehicle classification and localisation) l Key technology (coin collecting system) Customers worldwide / installed base l more than 3000 lanes l 20 countries 32
Slide 33: Transport Revenue The market
Transport Revenue The market l Market potential 2003 1) Fare Collection: 1300 CHFm Parking: 650 CHFm Toll: 1200 CHFm l Average yearly growth of the 3 segments: 6 - 8 % 2) l Growth not depending on economic cycles 1) Study: Zurich Consulting Group 2) Study: Arthur D. Little 33
Slide 34: Transport Revenue The major issues
Transport Revenue The major issues l Sold products and solutions that did not exist (in 1999 / 2000) l Underestimated time and resources to execute projects l Large liabilities based on the signed contracts l Inadequate personnel capabilities / skills / culture (e.g. management, project management,
Slide 35: Transport Revenue The achievements so far
Transport Revenue The achievements so far l Clean up of critical delivery projects l Professional process in bidding / projects (check the risks & deliver as committed) l Know-how reinforcement and retention l Adapting of current cost basis (Gümligen: in execution; France: initialised) l Sales funne
Slide 36: Transport Revenue Improving commercial outlook
Transport Revenue Improving commercial outlook Tangible examples New Projects l SBB BATS III order (28 CHFm order in March 03) l Bursa (Turkey): Fare Collection System (4 CHFm) l Toronto: Parking System (7 CHFm) Change Orders: l Berliner Verkehrsbetriebe, Retrofit (1.8 CHFm) l Deutsche Bahn, (New ap
Slide 37: Transport Revenue The committed turnaround
Transport Revenue The committed turnaround l Final 'clean up' of critical delivery projects l Professional process in bidding / 'deliver as committed' l Increased order backlog l Adjustment of current cost basis 37
Slide 38: Transport Revenue The committed turnaround
Transport Revenue The committed turnaround 0 2001 2002 2003 2004 38
Slide 39: Ascom Wireless Solutions: Growth
Ascom Wireless Solutions: Growth Daniel Roth, President of the Wireless Solutions Division 39
Slide 40: Ascom Wireless Solutions A brief presentation
Ascom Wireless Solutions A brief presentation l Leading supplier of on-site, wireless communications solutions – Messaging, alarm, voice l Specialised in customised, integrated, user-friendly systems solutions l Head office, R&D, production and logistics in Göteborg, Sweden l Revenues ~240 CHFm l 11
Slide 41: Wireless Solutions Worldwide presence
Wireless Solutions Worldwide presence We are active on a global scale through our own sales organisation, subsidiary companies and partners. l Wireless Solutions sales organisation l Subsidiary companies, partners 41
Slide 42: Wireless Solutions Offering
Wireless Solutions Offering l On-site, wireless systems solutions for mission-critical applications and demanding working environments l Systems that can be used stand-alone or integrated with other systems - thanks to an open interoperating concept l User-friendly solutions providing mobility, secu
Slide 43: Some key customers and our positioning
Wireless Solutions Some key customers and our positioning lWe are the market leader in health care communications solutions lWe are No. 1 for on-site messaging in Western Europe lWe have an installed base of 100,000 customer systems in Western Europe lOur security solutions are installed in 35% of a
Slide 44: Wireless Solutions Hospital application
Wireless Solutions Hospital application A solution that increases the effïciency of the internal communications at the Central Hospital in Vestfold, Norway: l Combination of messaging and telephony l Special application for internal transportation, PorterCOM l “Cardiac arrest” l Integration with ext
Slide 45: Order intake and operating result
Wireless Solutions Order intake and operating result 350 300 250 200 M CH F 150 Incoming Orders 100 Operating Result 50 Potentiell (Operating Result) 0 2001 A 2002 A 2003 E 2004 E 2005 E 45
Slide 46: Origin for sustained / growing profitability
Wireless Solutions Origin for sustained / growing profitability l Leadership position in the areas – In-house messaging – Voice (DECT) / messaging – Robust handsets l Provide added value to proven stable wireless communications technologies – Paging – DECT – IP l Significant volumes and position in
Slide 47: Expansion strategy - product and technology
Wireless Solutions Expansion strategy - product and technology l Build-up of OEM business – “license” product competence to others – Co-developments – Access to 3rd party distribution – Accelerate return on innovation l Extend to WL VoIP – Focus on handset and interoperability – Source in base techn
Slide 48: Expansion strategy - marketing and sales
Wireless Solutions Expansion strategy - marketing and sales l Introduce increased segment focus to drive division- wide resource allocation – Hospitals – Elderly care – Manufacturing and process industries – Secure establishments l Transform local distribution companies from products to solutions or
Slide 49: Expansion strategy - status
Wireless Solutions Expansion strategy - status l Build-up of OEM business – Agreement with a partner under implementation to make Ascom the largest Business DECT supplier – Further partnership opportunities under investigation l Extend to WL VoIP – Possible role and partnerships under investigation
Slide 50: Outlook and targets 2003
Outlook and targets 2003 Juhani Anttila, Chairman and CEO 50
Slide 51: Transformation of Ascom
Transformation of Ascom Board decision June 2002 : Further focusing l Orientation of Ascom on global niche markets with growth potential l Good market position and broad customer base in strategic core areas l Concentration on the core competence for secure, high-availability voice and data transmis
Slide 52: Corporate Governance (1)
Corporate Governance (1) Transparency of organisation, management processes and compensation l New standard of transparency for the future l The purpose is to give information and avoid speculations l Corporate Governance information is audited 52
Slide 53: Corporate Governance (2)
Corporate Governance (2) Checks and Balances l Lead Director and Vice Chairman l Audit Committee and Nomination/Compensation Committee l Frequent meetings 53
Slide 54: Outlook and targets 2003
Outlook and targets 2003 l Strengthening of the balance sheet l Cost cutting, streamlining of the group operations l Improvement of results in all business units l Growth in selected markets l Divestments and further net debt reduction l Substantial reduction of net loss 54
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