Ascom Holding Ag · SIX:ASCN
Ascom — H1 2005 Earnings Presentation
39 slides from Ascom's earnings presentation, Sep 6, 2005
Slide 1: First half-year 2005 Media and Analyst Conference
First half-year 2005 Media and Analyst Conference 6 September 2005 Agenda z Statement to Shareholder Request Juhani Anttila, Chairman z Key Achievements and Review H1 2005 Rudolf Hadorn, CEO z Execution of Mission-Critical Communication Strategy Rudolf Hadorn, CEO z Financial Results H1 2005 Thomas
Slide 2: Ausgangslage
Ausgangslage (1) z Im Grundsatz besteht keine Differenz zwischen dem Antrag der Aktionäre und der Haltung des Ascom Verwaltungsrates hinsichtlich der Verwendung freier Mittel z Der Verwaltungsrat bekräftigt erneut, dass freie Mittel, welche nicht zur Finanzierung des organischen Wachstums und selekt
Slide 3: Rückführung der freien Mittel an die Aktionäre
Rückführung der freien Mittel an die Aktionäre z Offene Fragen sind: Wie viel wird zurückgeführt, wie und wann können wir handeln? z Zum „wie“: Der Verwaltungsrat verfügt über einen Katalog von Rückführungs- möglichkeiten, darunter auch den von Sterling Investment / Swissfirst Bank vorgeschlagenen A
Slide 4: Schaffung der rechtlichen Voraussetzungen
Schaffung der rechtlichen Voraussetzungen z Closing und Mittelzufluss aus Transaktion Transport Revenue z Liquiditätsplanung für drei Jahre z Geschäftsplanung und die operative Umsetzungsplanung nach Rückführung der freien Mittel z Prüfung von Rechtsfragen auch zur Haftung der Gesellschaft und ihrer
Slide 5: Nächste Schritte
Nächste Schritte z Der Verwaltungsrat analysiert die komplexen Voraussetzungen und erarbeitet einen Vorgehensvorschlag z Der Verwaltungsrat hat den Antrag der Aktionäre (Sterling Investment / Swissfirst Bank) entgegen genommen und wird eine ausserordentliche Generalversammlung einberufen z Der Verwa
Slide 6: Ascom Group – Review H1 2005
Ascom Group – Review H1 2005 Results for H1 2005 z Revenues of CHF513.6m versus CHF536.1m in H1 2004 (adjusted for CHF 59.6m of divested activities in 2004) z Revenue growth of 4% YoY for Wireless Solutions and YoY stable for Security Solutions z EBIT of CHF50.3m versus CHF29.8m in H1 2004 z Net inc
Slide 7: Key achievements in executing corporate strategy
Ascom Group Key achievements in executing corporate strategy (1) Focus on Mission-Critical Communication – divestments executed z Reached key milestones of strategic focusing z Network Integration (Business Communication) Switzerland sold to sunrise for CHF33.5m in H1 2005 z Transport Revenue divisi
Slide 8: Group structure – Executive team completed
Group structure – Executive team completed Board of Directors CEO Rudolf Hadorn* General Secretary/Communications CFO/Investor Relations Daniel Lack Thomas Casata* Wireless Solutions Security Solutions Special Products Discontinued operations Fritz Mumenthaler* Bernd Kuhlin* Rudolf Hadorn* Riet Cado
Slide 9: Incoming order and revenue growth
Ascom Group Incoming order – not enough momentum in core in CHF million 600 526 * 534 500 400 354 * 330 300 204 200 172 100 32 8 0 H1 04 H1 05 H1 04 H1 05 H1 04 H1 05 (24) -100 Ascom Discontinued Total Variance (continuing) operations * excl. CHF61m of divested activities in 2004 Media and Analyst C
Slide 10: EBIT and net income
Ascom Group EBIT – supported by divestment (NI/Real Estate) result in CHF million 50.3 50 40 29.5 29.8 30 18.8 20.8 18.5 20.5 20 11.0 10 2.0 0 H1 04 H1 05 H1 04 H1 05 H1 04 H1 05 Ascom Discontinued Total Variance (continuing) operations Media and Analyst Conference, 6 September 2005 19 Ascom Group N
Slide 11: Revenue split and Wireless Solutions results
Revenue split and profitability H1 2005 Revenue CHF513.6m EBIT CHF50.3m in CHF million Transport Revenue Wireless Solutions 30 27.6 24% 26% 20 14.9 10 7.8 Network Int. CH, B, D 13% Security Solutions 22% 0 Special Products Group Ascom Discontinued Profits from 14% 1% (continuing) operations sale NI
Slide 12: Wireless Solutions Key facts in H1 2005
Wireless Solutions Key facts in H1 2005 – foster growth capabilities z Strenghtened the Management team with new General Manager and several new country organisation heads to raise execution – and sales power z Accelerated and increased investment in R&D (CHF4m more than in 2004) to launch new Voice
Slide 13: Voice over WiFi and IP DECT
Voice over WiFi VoWiFi Handsets WiFi IP WiFi PBX WiFi Fixed IP phone Smart Paging integration Messaging System System Media and Analyst Conference, 6 September 2005 25 IP DECT z The proven DECT standard take advantage of the VoIP Technology P1 P2 PP34PP Ethernet 5P7 6P8 P11P13 P9P10 P14 P15DGW16 P16
Slide 14: Wireless Solutions strategy: customer segments
IP enabled DECT system DECT Handsets IP IP DECT PBX Blade Fixed IP phone Smart Paging integration Messaging System System Media and Analyst Conference, 6 September 2005 27 Wireless Solutions strategy (1) Customer segments Hospitals Elderly care Industry Our reliable, wireless on-site communication e
Slide 15: Wireless Solutions strategy
Wireless Solutions strategy (2) Current position Growth opportunities z Strong, complete portfolio with proven z Vertical market opportunities: technology for core communication and – Hospital/elderly care market needs messaging functionality solutions, that increase operating and process efficiency
Slide 16: Security Solutions results and key facts
Security Solutions Supplier Business and Traffic unit with lower results in CHF million 150 121 115 114 120 99 90 60 30 0 -30 (1) (22) H1 2004 H1 2005 Variance Incoming order Net revenue 7.0 * (0.3) EBIT CHFm 6.1% (2.6)% Margin in % * H1 2004 includes release of excess warranty provisions of CHF5m M
Slide 17: Security Solutions strategy
Security Solutions strategy (1) – Customer segments Homeland Security Traffic Security Telecommunication z Army z Border control z Railway operators z Telco operators z Civil protection z Local and z Motorway operators z Infrastructure z Police national providers governments z Airports z Fire brigad
Slide 18: Security Solutions – Innovative new Products
Security Solutions – Innovative new Products z Homeland Security: “Greenbox” z Intelligent Access Node z Flexible interface configuration z Approved for defence / non-defence application z Based on adapted and ruggedized Linux-OS kernel z Easy adaptable for segment specific applications and to custo
Slide 19: Security Solutions strategy – Next steps
Security Solutions strategy – Next steps (3) z Traffic Security z Fix the issues (processes, execution issues) z Internationalise technical solutions and promote in Western European railway market z Homeland Security – Public Safety z Utilise the existing international hubs in CH, DE, AT, CZ, PL, SF
Slide 20: Strategic direction and Key Messages
Strategic direction (2) Key Messages z Major acquisitions are not considered during the next 18 months z Smaller technology and geography enhancing acquisitions for Wireless Solutions and Security Solutions will be considered z Special Products segment contains businesses, for which no new owner cou
Slide 21: Financial results H1 2005
Financial results H1 2005 Thomas Casata CFO Media and Analyst Conference, 6 September 2005 41 Ascom reporting structure (all figures H1 2005 and CHF million) Net revenue Operating profit 600 20 11 18 187 514 500 15 400 327 300 10 7 200 5 100 0 0 Ascom (continuing) Discontinued operations Total Ascom
Slide 22: Profit and loss statement – Ascom (continuing)
Profit and loss statement – Ascom (continuing) CHF million H1 2005 FY 2004 H2 2004 H1 2004 ∆ H1 Incoming order 330 789 374 415 (85) Net revenue 327 832 435 397 (70) Gross profit 108 251 129 122 (14) Gross margin 33.0% 30.2% 29.7% 30.9% 2.1% Functional cost (101) (203) (106) (97) (4) Operating profit
Slide 23: Wireless Solutions financials
Wireless Solutions – Increase in R&D spending CHF million H1 2005 FY 2004 H2 2004 H1 2004 ∆ H1 Incoming order 139 283 140 143 (4) Net revenue 137 273 141 132 5 Gross profit 66 130 65 65 1 Gross margin 48.4% 47.6% 46.4% 49.0% (0.6)% Operating profit 14 39 20 19 (5) Operating profit margin 10.2% 14.3%
Slide 24: Security Solutions financials
Security Solutions – First half year not satisfactory CHF million H1 2005 FY 2004 H2 2004 H1 2004 ∆ H1 Incoming order 99 226 105 121 (22) Net revenue 114 260 145 115 (1) Gross profit 30 70 33 37 1) (7) Gross margin 26.5% 26.9% 22.8% 31.9% (5.4)% Operating profit 3 19 1) 10 9 1) (6) Operating profit
Slide 25: Special Products financials
Special Products – Seasonal and cyclical impacts CHF million H1 2005 FY 2004 H2 2004 H1 2004 ∆ H1 Incoming order 89 223 123 100 (11) Net revenue 74 241 146 95 (21) Gross profit 13 47 31 16 (3) Gross margin 17.9% 19.5% 21.2% 17.0% 0.9% Operating profit 0 14 9 5 (5) Operating profit margin 0.3% 5.8% 6
Slide 26: Discontinued operations P&L
Ascom reporting structure (all figures H1 2005 and CHF million) Net revenue Operating profit 600 20 11 18 187 514 500 15 400 327 300 10 7 200 5 100 0 0 Ascom (continuing) Discontinued operations Total Ascom (continuing) Discontinued operations Total EBIT Net income 60 60 29 50 29 51 50 50 40 40 30 2
Slide 27: Transport Revenue and Network Integration
Transport Revenue – Strong incoming order CHF million H1 2005 FY 2004 H2 2004 H1 2004 ∆ H1 Incoming order 152 308 206 102 50 Net revenue 121 241 109 132 (11) Gross profit 35 67 32 35 - Gross margin 29.0% 27.8% 29.6% 26.6% 2.4% Operating profit 13 23 11 12 1 Operating profit margin 10.6% 9.5% 10.1% 9
Slide 28: Profit and loss statement and Balance sheet
Profit and loss statement – Ascom Group CHF million H1 2005 FY 2004 H2 2004 H1 2004 ∆ H1 Net revenue 327 832 435 397 (70) Gross profit 108 251 129 122 (14) Gross margin 33.0% 30.2% 29.7% 30.9% 2.1% Operating profit 7 48 22 26 (19) Operating profit margin 2.1% 5.8% 5.1% 6.5% (4.4)% EBIT 21 48 29 19 2
Slide 29: Net Working Capital and net cash position
Net Working Capital 250 in CHF million NWC in % of net revenue decreased from 16% to 14% (12 months rolling) 200 186 7 150 110 (42) 6 100 (76) (47) 50 0 31 Dec 04 30 June 05 Variance Discontinued Inventory + Accounts Accounts Prepayments Receivable Payable + Prepayments Media and Analyst Conference,
Slide 30: Operating cash flow and Outlook and Summary
Continued positive operating cash flow CHF million H1 2005 FY 2004 H2 2004 H1 2004 ∆ H1 Cash flow from operating activities before changes in NWC 28 100 62 38 (10) Changes in NWC 44 27 3 24 20 Cash flow from operating activities 72 127 65 62 10 Net cash flow from operating activities 29 45 25 20 9 N
Slide 31: Outlook and Summary
Outlook z Outlook until year end 2005 z Wireless Solutions 2005: Revenue growth 4-5%, EBIT* 9-11% z Security Solutions 2005: Lower revenue than 2004, EBIT* break-even result z Net income for Ascom expected to be higher than 2004 (without potential profits from sale of Transport Revenue) z Mid- to lo
Slide 32: Special Products – Payphones below record 2004 results
Additional information Media and Analyst Conference, 6 September 2005 63 Special Products Payphones below record 2004 results Net revenue in CHF million 50 44 41 40 30 30 25 20 17 13 10 0 H1 04 H1 05 H1 04 H1 05 H1 04 H1 05 Network Integration Italy Payphones Other 45 54 31 20 23 15 Incoming order C
Slide 33: Special Products Key facts in H1 2005
Special Products Key facts in H1 2005 z Network Integration Italy – Revenue growth of 6% to CHF43.7m despite difficult market environment – Seasonally known weak H1 on profitabilty z Payphones – Substantial order signed for 20,000 payphones in Algeria – Revenue of CHF12.8m vs. high level of CHF29.5m
Slide 34: Transport Revenue and Network Integration key facts
Transport Revenue Key facts in H1 2005 z Strong incoming order CHF152.2m vs. CHF101.7m in H1 2004 z Fare Collection – Netherland Railways, City of Charlotte North Carolina, Northern Italian Region z Parking – Atlanta Hartsfield-Jackson Int. Airport, Detroit Metropolitan Airport, City of Malaga, Stra
Slide 35: Key figures H1 2005: Segment view
Key figures H1 2005: Segment view Wireless Security Special Group Ascom Discont. Total CHF million Solutions Solutions Products (contin.) 1) Operat. Incoming order 139 99 89 5 330 204 534 Net revenue 137 114 74 4 327 187 514 Gross profit 66 30 13 (1) 108 50 158 Gross margin 48.4% 26.5% 17.9% n/a 33.
Slide 36: Key figures: Discontinued Operations
Key figures H1 2005: Details Discontinued Operations Netw. Int. Netw. Int. Network Transport Total CHF million CH B, D Int. Total Revenue Disc. Op. Incoming order 36 16 52 152 204 Net revenue 50 15 66 121 187 Gross profit 10 4 15 35 50 Gross margin 20.2% 28.8% 22.3% 29.0% 26.6% Functional cost (12)
Slide 37: Balance sheet details
Balance sheet details – other current assets 30 June 2005 31 Dec 2004 30 June 2004 CHFm CHFm CHFm Trade receivables 122 237 216 Other receivables 50 40 49 Prepayments / Accruals 25 22 28 Accrued revenue POC 53 37 25 Total other current assets 250 336 318 Media and Analyst Conference, 6 September 200
Slide 38: Personnel and Legal Disclaimer
Personnel 3530 employees as at 30 June 2005 Group Functions USA Network I. B, D 5% 7% RoW 2% 4% Wireless Solutions other Europe Switzerland 33% 6% 27% Sweden Transport Rev. 11% 23% Belgium Netherlands 5% 8% Germany Italy 4% 4% France Special Products Security Solutions UK 21% 13% 22% 5% Media and An
Slide 39: Solutions in time
Solutions in time