Slide 1: The New Freedom in Business Communication
THE NEW FREEDOM IN BUSINESS COMMUNICATION Financial Report as of 30 September 2018 Munich | 22 November 2018
Slide 2: 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 2
Slide 3: Introduction & Strategy
1 Introduction & Strategy 3
Slide 4: NFON – The only true Pan-European Cloud PBX company
NFON – The only true Pan-European Cloud PBX company 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 13 Cloud PBX European countries Minimal Aut
Slide 5: Shift to cloud communication creates unique opportunity
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 16% CAGR On-premise & Hosted PBX solutions 2017 2022 Market potential based on NFON’s recurring ARPU1 Source: MZA (2017)
Slide 6: Coherent multi vector growth strategy
Coherent multi vector 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 open APIs to allow proven market f
Slide 7: Business Highlights
2 Business Highlights 7
Slide 8: NFON continues successful development
NFON continues successful development Revenue growth of 20.2% Recurring revenue even higher with 27.9% 81% recurring revenue above target range Customer base Increase of seats by 28% Increase in customer base to over 20,000 Successful launch of new NFON-client Cloudya Setting up new company in Italy
Slide 9: The New NFON Core
THE NEW NFON CORE 9
Slide 10: Cloudya more than a product
CLOUDYA MORE THAN A PRODUCT UNIQUE, TRANSPARENT, CLEAR ONE ONE Naming Service ONE Offer ONE Tariff ONE Go2Market 10
Slide 11: Cloudya any device anywhere
CLOUDYA ANY DEVICE ANYWHERE 11
Slide 12: Cloudya any browser
CLOUDYA ANY BROWSER 12
Slide 13: Tariff: clear structure for our customers
TARIFF CLEAR STRUCTUR FOR OUR CUSTOMERS Mobility Option* Business Premium VALUE • NEW App Suite BASED • Mobility Option Business Standard • 9 destop phones • NEW App Suite • SRTP encryption PRICE • 1 desktop phone • Neorecording basic BASED • SRTP encryption *) only available with Business Standard
Slide 14: Cloudya easy independent reliable
CLOUDYA EASY INDEPENDENT RELIABLE 14
Slide 15: Outlook NFON Strategy – UCaaS
OUTLOOK NFON STRATEGY – UCAAS 2017 Cloud PBX 2020 Phase 1 … API Ncontrol APIs Cloud PBX Apps Adminis- tration Apps Calling Configuration Phones CTI Mobile Web Softphone Collaboration Conf. calls IVR Groups Queues Desktop FMC CTI UCC Chat Q4 Chat / IM 2018 15
Slide 16: Outlook NFON Strategy – UCaaS
OUTLOOK NFON STRATEGY – UCAAS 2017 Cloud PBX 2020 Phase 2 … API Ncontrol APIs Chat / IM CTI UCC Adminis- tration Apps Collab. Rooms Group Chat Video Calls Chat Message History Softphone CTI Collaboration Presence Presentation Screen Sharing Video Conf. FMC CTI UCC Chat Chat / IM 16
Slide 17: Business Model & Financial Overview
3 Business Model & Financial Overview 17
Slide 18: NFON's top line mechanics are centred around recurring revenue
NFON’s top line mechanics are centred around recurring revenue Recurring revenue 81% Non-recurring revenue 19% Seats ARPU One-off €31.2m 9M 2018 revenue Licence fee Airtime Premium Activation fee Hardware Professional per extension solutions services 18
Slide 19: Share of recurring revenue above target range
Share of recurring revenue above target range Development total recurring vs. non-recurring revenues Comments €m Significant increase of total revenue by 20.2% 82,0% 40 80.9% Lower hardware sales led to a decrease of non- 80,0% 35 recurring revenue by -4.0% 7.9 Recurring revenues are strong growth d
Slide 20: Sustainable recurring revenues based on growth in number of seats
Sustainable recurring revenues based on continuous growth in total number of seats Development number of seats Comments and ARPU Increase of total number of seats by 28% € per seat per month 306 Very low gross churn rate of <0.5% per month underlines quality of product and service and 253 guarantees
Slide 21: Consistently increasing gross margin
Consistently increasing gross margin Cost of materials and gross margin development Comments €m, % of revenue Cost of materials are largely variable in nature and mainly comprise of costs for hardware sold, costs for airtime sold and data centre housing costs 9.7 Cost of materials rose disproportion
Slide 22: Increase of adj. personnel expenses due to growing work force
Increase of adj. personnel expenses due to growing work force Adj. personnel expense development Comments €m, % of revenue 13.41 Personnel expenses as reported amount to €17.4m 12.31 12.4 Adjustments unchanged compared to half-year 10.71 2018 of €5.0m 9.9 One-off effect out of share-based payments o
Slide 23: Marketing expenses increase as expected
Marketing expenses increase as expected due to higher marketing activities Marketing expense development Comments €m, % of revenue Marketing expenses increase by 50.1% Start of big marketing campaign in Austria to raise awareness of NFON 3.7 3.6 3.6 Gaining new partners Introduction of Cloudya – the
Slide 24: Decrease of adj. other expenses demonstrates operating leverage
Consistent decrease of adj. other expenses as % of revenue demonstrates high operating leverage Other expenses development without marketing expenses Comments and sales commissions In general other expenses comprise of sales €m, % of revenue commissions, supporting cost, general 5.51 administration
Slide 25: Break even in adjusted EBITDA despite higher costs
NFON continue to show break even in adjusted EBITDA despite higher costs Detailed reconciliation of one-off items Comments Reconciliation from EBITDA EBITDA as reported amounts to €-6.5m – stable on 9M 2018 9M 2017 to adjusted EBITDA half-year 2018 level €m In accordance with strategy, only personne
Slide 26: 9 months underline positive development of NFON
9 months underline positive development of NFON €31.2m revenues with 81% recurring revenues 305,000+ seats Blended ARPU development as Customer expected base <0.5% gross churn rate per month Adj. EBITDA break even Launch of Cloudya Setting up new company in Italy 26
Slide 27: NFON confirms guidance for 2018
NFON confirms guidance for 2018 2017 2018 Number 253k We expect a significant growth of our customer base by around 30% of seats Revenue We expect the revenue growth rate for 2018 to clearly outperform 17.3% growth (%) the revenue growth rate of 2017 Recurring revenue 77.9% We expect the resulting r
Slide 28: Key Investment Highlights and Q&A
4 Key Investment Highlights and Q&A 28
Slide 29: 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 30: Thanks
Thanks @NFONcom #cloud #telephony #allip 30
Slide 31: Appendix
5 Appendix 31
Slide 32: Management Board of NFON AG
Management Board of NFON AG 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: NFON share at a glance
NFON share at a glance Facts Shareholder structure1 ISIN DE000A0N4N52 Segment Prime Standard/ Telecommunication Shares 13.8 million Designated Baader Bank sponsor ODDO Seydler First day of trading 11 May 2018 Coverage Berenberg Bank, Baader Bank, Oddo BHF, Hauck & Aufhäuser 30.10% 17.8% 7.74% 7.36%
Slide 34: Financial calendar
Financial calendar Date Event 22 Nov 2018 Interim Report 3rd Quarter 2018 Web- and Telephone Conference 27 Nov 2018 German Equity Forum Frankfurt Analyst Presentation and 1-on-1 Beginning March 2019 Preliminary results 2018 Web- and Telephone Conference 11 April 2019 Annual Report 2018 Web- and Tele
Slide 35: Contact
Contact Sabina Prüser Head of Investor Relations Blog NFON AG https://www.nfon.com/blog/de/ Machtlfinger Straße 7 81379 München Facebook https://facebook.com/NFONcom Telephone Fon +49 (0) 89 453 00 134 Twitter https://twitter.com/NFONcom Fax + 49 (0) 89 453 00 33 134 sabina.prueser@nfon.com 35
Slide 36: Thanks
Thanks @NFONcom #cloud #telephony #allip 36