Enea AB · OMXSTO:ENEA
Enea AB — Q3 2020 Earnings Presentation
20 slides from Enea AB's earnings presentation, Oct 21, 2020
Slide 1: Q3 2020 Financial Results
Q3 2020 Financial Results Jan Häglund, President and CEO Björn Westberg, CFO October 21, 2020
Slide 2: Agenda
Agenda Introduction Financial Results Way Forward and Outlook 2
Slide 3: Summary
Summary Jul-Sep 2020 Jan-Sep 2020 OPERATING NET DEBT TO OPERATING HEAD NET SALES NET SALES MARGIN 1/ EBITDA MARGIN 1/ QUARTER KISTA, SWEDEN 206 23.0 0.43 667 22.3 SEK m SEK m PERCENT PERCENT EARNINGS PER OPERATING EARNINGS PER OPERATING LISTED R&D 2/ SHARE CASH FLOW SHARE CASH FLOW NASDAQ STOCKHOLM
Slide 4: Impact from Corona Pandemic in Q3
Impact from Corona Pandemic in Q3 Market Conditions Enea Response and Position Delays in customer investments, which The majority of our business is stable, means that certain projects (e.g. 5G) and supported by a high degree of recurring software upgrades are postponed revenue Lower demand fo
Slide 5: Key Events for Enea During the Third Quarter
Key Events for Enea During the Third Quarter Acquired Aptilo, a leading provider of policy and access control Acquisition solutions for carrier Wi-Fi and IoT (Internet of Things) Vodafone Ireland delivers outstanding video Quality of Video optimization Experience (QoE) using Enea Traffic Management
Slide 6: Aptilo Acquisition
Aptilo Acquisition Aptilo Swedish company with international reach A leading provider of Policy and Access Control solutions for carrier Wi-Fi and IoT Deployed by > 100 operators in 75 countries Sold both directly and indirectly Enea + Aptilo 5G + Wi-Fi 6 combination creates a unique offer
Slide 7: Acquisition Financials
Acquisition Financials Enterprise value of 150 MSEK - 92 MSEK as purchase consideration - Net debt (and similar) adjustment of 58 MSEK Financed by cash and bank loan Expected to be EPS accretive 2021 Transaction costs ~ 4 MSEK 7
Slide 8: Aptilo Portfolio and Market Position
Aptilo Portfolio and Market Position Operator Operator Operator IoT Zero Touch B2C Wi-Fi / B2B Wi-Fi Policy Wi-Fi IoT Offloading Control 8
Slide 9: Vision: 5G Core for all Wireless Access and all Mobile Endpoints
Vision: 5G Core for all Wireless Access and all Mobile Endpoints Policy and access control for cellular and Wi-Fi 4G/5G 5G Core Wi-Fi Management of mobiles phones and IoT devices 9
Slide 10: Aptilo Expanding Product Group Network Solutions
Aptilo Expanding Product Group Network Solutions Software Development Services Operating Systems Network Solutions Pie chart for illustration only 10
Slide 11: Network Solutions: Survey Shows that Customers Depend on Traffic Intelligence
Network Solutions: Survey Shows that Customers Depend on Traffic Intelligence Question: what level of traffic visibility do you require? Source: Enea survey of Product Managers using DPI in cybersecurity solutions, 2020 11
Slide 12: Network Solutions: Innovation in Video Traffic Optimization
Network Solutions: Innovation in Video Traffic Optimization 4G continues to grow and will still represent 56% of connections in 2025 (source: GSMA) Enea RAN Congestion Manager (RCM) 15% increased with Machine Learning increases mobile operators’ 4G RAN capacity by 15% radio capacity Operators
Slide 13: Agenda
Agenda Introduction Financial Results Way Forward and Outlook 13
Slide 14: Net sales decreased by 13% (currency adjusted)
Net sales decreased by 13% (currency adjusted) 2020 2019 2020 2019 Q3 Q3 Q1-Q3 Q1-Q3 Net sales (SEK m) Net sales (SEK m) 206 247 667 736 1/ 300 Growth (%) -16 19 -9 25 250 Growth (%, currency adjusted) -13 15 -9 20 1/ the acquired Policy and Access Control business included from 1 March 2019 200 150
Slide 15: Network Solutions represent 2/3 of Total Revenue
Network Solutions represent 2/3 of Total Revenue 250 Net sales per Product group (SEK m) Network Solutions Net sales decreased by 11 percent. 200 Stable recurring revenues but delays 62% in customer investments in the quarter. 150 54% 66% 66% 100 28% 23% Operating System Solutions 50 18% 18% Net
Slide 16: 23 percent EBIT margin in Q3
23 percent EBIT margin in Q3 (excl NRI) Operating profit excluding NRI (SEK m) 80 2020 2019 2020 2019 Q3 Q3 Q1-Q3 Q1-Q3 60 EBIT excl. non-recurring items, SEK m 47.6 63.5 148.4 201.5 40 EBIT, SEK m 42.8 63.5 124.5 197.7 20 EBIT margin excl. non-recurring items, % 23.0 25.7 22.3 27.4 EBIT margin, % 2
Slide 17: Solid Financial Position
Solid Financial Position Stable cash flow • Q3 cash flow before change in WC amounted to SEK 68.1 m (78.1) generation • Q3 cash flow from operations amounted to SEK 82.8 m (69.5) Effective • Interest bearing bank loans amounted to SEK 301.6 m (total facility of SEK 400 m) • Cash and cash equivalents
Slide 18: Agenda
Agenda Introduction Financial Results Way Forward and Outlook 18
Slide 19: Market Outlook 2020
Market Outlook 2020 Increased uncertainty in the short and Continued positive outlook for software medium term due to the pandemic in telecom and enterprise networks Our target of an operating margin above 20 percent remains, but the consequences of the corona pandemic will have a negative impact on
Slide 20: Thank you!
Thank you! www.enea.com