Slide 1: Half year results 2019
Munich | 23 August 2019 Half year results 2019
Slide 2: Disclaimer
NFON AG Disclaimer This communication is for information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities of the Company. The securities discussed herein have not been and will not be registered under the U.S. Securities Ac
Slide 3: We want to dominate the European Cloud telephony market
We want to dominate the European Cloud telephony market by delivering freedom of business communication. Growth Excellence Leadership Award 2017 3
Slide 4: Delivering on our growth strategy
Coherent multi vector growth strategy Delivering on our growth strategy Increase Capitalise on high penetration and Transform product Open APIs Expand regionally market fragmentation adoption Roll-out of innovative Further develop Leverage Consolidate highly Increase marketing features will attract
Slide 5: Milestones Completed 2018/2019
Milestones Completed 2018/2019 408,393 Recurring Revenue 390,826 85% Share revenue 320,728 H1 2019 305,616 287,998 253,360 269,392 31.12.2017 31.03.2018 30.06.2018 30.09.2018 31.12.2018 31.03.2019 30.06.2019 IPO CLOUDYA Takeover 15 countries 11 May 2018 New core product DTS AG France 14 countries It
Slide 6: European subscribers
Strong market position Only pan-European Cloud PBX provider European Cloud PBX providers with own technology NFON’s European footprint Seats 1 600k Proof of concept >25% market share European subscribers 300k RingCentral 8x8 Placetel sipgate Másmóvil vozilia voiceworks Dozens voztelecom of start-ups
Slide 7: NFON AG is developing along guidance 2019
Key Figures NFON AG is developing along guidance 2019 Revenue growth of 28%1 Recurring revenue growth even higher 36% 85% recurring revenues are above guided range, strong basis for further revenue growth acceleration in H2 Customer- • me base Increase of seats by 42%2 underpins the dynamic
Slide 8: Proportion of recurring revenues well above guidance
Business model Proportion of recurring revenues well above guidance Recurring revenues 85% Non-recurring revenues 15% Seats ARPU One-off €26m H1 2019 revenues Licence fee Airtime Premium Activation fee Hardware Professional per extension solutions services Half Year Results 2019 8
Slide 9: Significant increase of recurring revenues
Revenue development Significant increase of recurring revenues Development total recurring vs. non-recurring revenues Comments Total revenues grow by 27.7% to €26.3m in comparison to €20.6m in half year 2018 50.0 86.0 Revenue first time with Deutsche Telefon Standard (since 85.2 March 2019) 45.0 84.
Slide 10: Very strong development of seat base and ARPU stabilization
Strong growth of seat base Very strong development of seat base and ARPU stabilization Development number of seats (‘000) Comments and ARPU Increase of total number of seats by 42% 408 Stable development of ARPU1 since acquisition of 391 DTS: ARPU Q1 2019: 9.74€ 321 ARPU H1 2019: 9.76€ 287 253 Influ
Slide 11: Consistently increasing gross margin emphasizes scalability of the business model
Gross Margin Consistently increasing gross margin emphasizes scalability of the business model Cost of materials and gross margin development Comments €m, % of revenue Cost of materials are largely variable in nature and 11.1 mainly comprise of costs for hardware sold, costs for airtime sold and dat
Slide 12: Securing tomorrow's growth by investing in today's workforce
Employees Securing tomorrow‘s growth by investing in today‘s workforce Development of personnel Comments # of employees Number of employees rose by 68% from 216 to 362 as of June 30, 2019 compared to June 30, 2018 77 Acquisition of DTS with additional employees Increase mainly in Sales, Marketing an
Slide 13: Increase of personnel expenses as expected
Personnel expenses Increase of personnel expenses as expected Adj. personnel expense development Comments 17.1 €m Personnel expenses as reported amount to €12.0m (H1 2018: €13.1m) 13.3 12.3 Personnel expenses H1 2019 include €0.5m 11.4 for Stock Option Plan and retention bonus Personnel costs reliev
Slide 14: Gaining market shares through intensified marketing activities
Marketing expenses Gaining market shares through intensified marketing activities Marketing expense development Comments €m Marketing expense increases as planned by 71.6% building a strong brand that drives sales and partner growth 5.5 Starting marketing activities in Italy and France Partner roads
Slide 15: Increase of other operating expenses due to ongoing European expansion
Adjusted other operating expenses Increase of other operating expenses due to ongoing European expansion Other expenses development without marketing expenses Comments and sales commissions In general other expenses comprise of sales €m commissions, supporting cost, general 6.51 administration expen
Slide 16: EBITDA mirrors successful strategy implementation
Development of earnings EBITDA mirros successful strategy implementation Detailed reconciliation of one-off items Comments Reconciliation from EBITDA EBITDA as reported amounts to approx. €-3.8m H1 2019 H1 2018 to adjusted EBITDA In accordance with strategy, personnel costs, marketing and sales comm
Slide 17: Accelerating growth in 2019
Outlook 2019 Accelerating growth in 2019 2017 2018 2019 Number 253k 27% We expect to increase our customer base by at least 45% of seats Revenue We expect a revenue growth rate at the lower end of the range of 17.3% 21% growth 40% and 45% Recurring We expect the resulting recurring revenues in 2019
Slide 18: Key investment highlights
Key investment highlights Huge addressable business communication market being disrupted by 1 structural shift to Cloud PBX solutions Only true Pan-European Cloud PBX company best positioned to become 2 the dominant European player Strong business model resulting in unique combination of massive gro
Slide 19: Thanks
Thanks @NFONcom #cloud #telephony #allip
Slide 20: Appendix
Appendix Further information about NFON
Slide 21: One year after IPO
One year after IPO Preliminiary figures & Business highlights
Slide 22: Wind of change
Business communication Wind of change swisscom 2017 Proliferation of SaaS Deutsche Telekom 2018 Carriers are moving delivery models from ISDN to All orange 2020 IP BT 2025 Increasing multi channel and multi The way device communication we work keeps changing 24/7 ‘Full cloud model’ Hybrid model Glob
Slide 23: Cloud PBX solutions tailored to the needs of today's business communication
NFON at a glance Cloud PBX solutions tailored to the needs of today’s business communication Classic on-premise PBX Advantages of cloud telephony Founded 2007 Increased functionality Device agnostic HQ in Munich, Germany PBX Analog/ISDN PSTN PBX Lower total Flexibility cost of Active in ownership 14
Slide 24: Shift to cloud communication creates unique opportunity
Active participation in market consolidation Shift to cloud communication creates unique opportunity European business PBX market 2017 Disruptive business Cloud PBX market €3.2bn €16.7bn €1.6bn >26m seats 135m 13m seats seats c.16% CAGR On-premise & Hosted PBX solutions 2017 2023 Market potential ba
Slide 25: Penetration in Continental Europe is following the United Kingdom and North America
Market penetration and expected development Penetration in Continental Europe is following the United Kingdom and North America North America Continental Europe United Kingdom Germany 4% 13% 14% 18% 22% 25% 34% 38% Cloud PBX penetration 2018 (%) Source: Cavell 2018/ Note: Penetration based on cloud
Slide 26: Competitive environment in a fast changing business
Business communication Competitive environment in a fast changing business UCaaS technology vendors Metaswitch broadsoft Cloud centile telephony cisco specialists BT vodafone Telefonica orange Telecom skype Gamma amazon Avaya On-premise PBX Panasonic Google Software based economy Mitel NEC Microsoft
Slide 27: Flexible go-to-market model
Sales channels Flexible go-to-market model The right partner for each customer segment … … in our European markets e.g. e.g. T-Systems Wholesale w/o Partner Domino’s Telefonica airtime Elektrobit e.g. acemeo Hackney FP Wholesale w/ Partner Lufthansa chess Industry Solutions westcoast airtime Mary Ka
Slide 28: Introduction of Cloudya – More than a product
Transform product Introduction of Cloudya – More than a product ONE ONE Naming Service ONE Offer ONE Tariff ONE Go2Market Half Year Results 2019 28
Slide 29: Leading position in Germany fuels accelerated growth
Capitalise on high market fragmentation Leading position in Germany fuels accelerated growth Acquisition of DTS in Feb/March 2019 › Founded 2007, headquartered in Germany (Mainz) Nr. 1 in › Strong and focussed partner network in Germany Germany › Complementary product portfolio >50,000 Cloud-PBX-Sea
Slide 30: NFON accompanies entire customer development
Complementary product portfolio – Attract additional customers NFON accompanies entire customer development Tomorrow´s Technologies used by customers today's customers ONE TECHNOLOGY future- oriented DTS SIP CentrexX will perfectly complement the Cloud product portfolio of NFON DTS SIP Trunk in the
Slide 31: NFON wants to dominate the European cloud telephony market
Drive market penetration – Adoption of new customer NFON wants to dominate the European cloud telephony market In view of the fact that European carriers have already started to switch to All-IP, customers can look forward to a smooth transition to future-proof cloud PBX technology. 135m 135m seats
Slide 32: Management Board
NFON AG Management Board Hans Szymanski Jan-Peter Koopmann César Flores Rodríguez CEO/CFO CTO CSO >20 years of C-Level >20 years of experience in >10 years of C-Level experience the IT/Telco industry experience Previous experience Previous experience Previous experience includes includes includes −
Slide 33: Share at a glance
NFON AG Share at a glance Facts Shareholder structure ISIN DE000A0N4N52 Segment Prime Standard/ Telecommunication Shares 14.1 million (as per 22 March 2019) Designated Baader Bank sponsor ODDO Seydler First day of trading 11 May 2018 Coverage Berenberg Bank, Baader Bank, Oddo BHF, Hauck & Aufhäuser
Slide 34: Financial calendar
Financial calendar Date Event 23 Aug 2019 Half Year Results0 2019 Web- and Telephone Conference Conference citi Bank, London Sep 2019 Berenberg and Baader, Munich Presentations and 1-on-1 14 Nov 2019 3rd quarter results 2019 Web- and Telephone Conference Nov 2019 Equity Forum Frankfurt a. M. Present
Slide 35: Contact
Investor Relations Contact Sabina Prüser Head of Investor Relations Blog NFON AG https://www.nfon.com/blog/de/ Machtlfinger Straße 7 81379 Munich Facebook Germany https://facebook.com/NFONcom Telephone Twitter https://twitter.com/NFONcom Fon + 49 (0) 89 453 00 134 Fax + 49 (0) 89 453 00 33 134 sabin