Ascom Holding Ag · SIX:ASCN

Ascom — H1 2011 Earnings Presentation

47 slides from Ascom's earnings presentation, Aug 18, 2011

  1. Slide 1: Welcome

    “ WELCOME TO TH

  2. Slide 2: 2011 Half-Year Results, 18 August 2011

    [ ] 2011 HALF-YEAR RESULTS 18 AUGUST 2011 Fritz Mumenthaler CEO Martin Zwyssig CFO 2011 Half-Year Results, 18/08/2011 © Ascom Group 2

  3. Slide 3: Today's Key Messages

    TODAY’S KEY MESSAGES  Solid half-year results in line with existing full-year guidance  Concentration of strengths – best owners to be sought for Security Communication  2011 full-year guidance increased to an EBITDA margin of 13-14%* (continuing operations)  Mid-term target of a Group EBITDA ma

  4. Slide 4: Agenda

    [ ] AGENDA  2011 H1 ASCOM AT A GLANCE  THE NEXT STEP IN IMPLEMENTING OUR STRATEGY  2011 H1 FINANCIAL RESULTS  HIGHLIGHTS FROM THE DIVISIONS  LOOKING FORWARD 2011 Half-Year Results, 18/08/2011 © Ascom Group 4

  5. Slide 5: 2011 H1 Ascom at a Glance

    [ ] 2011 H1 ASCOM AT A GLANCE 2011 Half-Year Results, 18/08/2011 © Ascom Group 5

  6. Slide 6: Ascom Achieves a Solid Half-Year Operating Result

    ASCOM ACHIEVES A SOLID HALF-YEAR OPERATING RESULT  On an adjusted basis net of negative currency effects and divestments, Group revenue stable and in line with company’s guidance  Gross margin increased to 48.7% (H1 2010: 46.9%)  Wireless Solutions and Network Testing invested as planned in new p

  7. Slide 7: Overall Stable Revenue Development

    OVERALL STABLE REVENUE DEVELOPMENT  Revenue development in line with company’s guidance  Total revenue of CHF 253.1m (H1 2010: CHF 281.2m) Flat on an adjusted basis, in line with company’s guidance Wireless Solutions: Organic growth of 5.2% Network Testing: Flat revenue development net of currency

  8. Slide 8: EBITDA Development in Line with Expectations

    EBITDA DEVELOPMENT IN LINE WITH EXPECTATIONS  EBITDA margin of 11.7% within company’s guidance  Group EBITDA: CHF 29.6m (H1 2010: CHF 33.9m) EBITDA margin: 11.7% (H1 2010: 12.1%) Group EBITDA increased by 4.0% adjusted by currency & divestment effects  Group EBIT: CHF 19.5m (H1 2010: CHF 24.0m) E

  9. Slide 9: Divisions: Strong Result of Wireless Solutions

    DIVISIONS: STRONG RESULT OF WIRELESS SOLUTIONS Wireless Solutions  Increasing revenues: Organic growth of 5.2%  Improved EBITDA: CHF 17.8m (H1 2010: CHF 17.3m)  Strong EBITDA margin 13.4% (H1 2010: 12.5%) Network Testing  Stable revenue development (adjusted for FX and divestment effects)  Lowe

  10. Slide 10: Solid Balance Sheet

    SOLID BALANCE SHEET Solid balance sheet as per 30 June 2011  Cash and cash equivalents of CHF 80.4m  Net cash CHF 42.8m  Equity ratio improved to 35.9% 2011 Half-Year Results, 18/08/2011 © Ascom Group 10

  11. Slide 11: The Next Step in Implementing Our Strategy

    [ ] THE NEXT STEP IN IMPLEMENTING OUR STRATEGY 2011 Half-Year Results, 18/08/2011 © Ascom Group 11

  12. Slide 12: Mission-Critical Communication Strategy Since 2004

    MISSION-CRITICAL COMMUNICATION STRATEGY SINCE 2004 Customer needs  Communication systems and solutions, which enable quicker and very reliable responses, when security, safety or efficiency is mission critical Need for state-of-the-art products, systems, solutions and services 0  Continuous innova

  13. Slide 13: Security Communication: Thorough Evaluation of Strategic Position

    SECURITY COMMUNICATION: THOROUGH EVALUATION OF STRATEGIC POSITION Thorough review of strategic position by Board of Directors and CEO:  Security Communication is mainly Swiss based and contains different small business areas such as Defense, Public Safety and Infrastructure Operators with limited s

  14. Slide 14: Security Communication: Defense Business - Strategic Rationale

    SECURITY COMMUNICATION: DEFENSE BUSINESS - STRATEGIC RATIONALE  Substantial dependency from one single customer  The Swiss defense market is small, the demand is cyclical and overall declining  Given the small domestic market, growth opportunities are limited and entail substantial risks  The st

  15. Slide 15: Security Communication: Best Owners to Be Sought For

    SECURITY COMMUNICATION: BEST OWNERS TO BE SOUGHT FOR  New and better ownership will be sought for the businesses of Security Communication  First priority will be given to the obligations toward customers and employees; Ascom will respect their interests and has a positive track record with busine

  16. Slide 16: Concentration on Two Strong Divisions

    CONCENTRATION ON TWO STRONG DIVISIONS Investments in new products, markets, and technologies aim at further consolidating and expanding our leading market position in the respective markets. Our strategy focuses on creating sustainable values. Wireless Solutions Network Testing Leading wireless on-s

  17. Slide 17: Consistent Growth Strategy

    CONSISTENT GROWTH STRATEGY  Ascom will continue to consistently pursue the corporate strategy it adopted in 2004 and concentrate on Mission-Critical Communication in the business-to-business strategy  The two divisions Wireless Solutions and Network Testing are well positioned to capture organical

  18. Slide 18: Acquisition of Miratel

    ACQUISITION OF MIRATEL: ANOTHER STEP TOWARDS GLOBAL MARKET LEADERSHIP IN HEALTHCARE COMMUNICATION  Ascom further strengthened its leading position as a provider of communication solutions for the healthcare sector by acquiring Finnish company Miratel as of 1 July 2011  Miratel is an excellent stra

  19. Slide 19: Our Management Team

    OUR MANAGEMENT TEAM BOARD OF DIRECTORS CEO Fritz Mumenthaler* CFO/Investor Relations General Secretary/Comm. Daniel Lack Human Resources Kurt Renggli v Martin Zwyssig* General Counsel Judith Bischof ** Wireless Solutions Network Testing Security Communication Claes Ödman* Rikard Lundqvist* Fritz Gan

  20. Slide 20: 2011 H1 Financial Results

    [ ] 2011 H1 FINANCIAL RESULTS Martin Zwyssig CFO 2011 Half-Year Results, 18/08/2011 © Ascom Group 20

  21. Slide 21: Consolidated Income Statement

    CONSOLIDATED INCOME STATEMENT CHFm 1st half 2010 1st half 2010 (FX adj.*) 1st half 2011 Revenue 281.2 260.3 253.1 Gross profit 131.8 122.4 123.2 Gross margin (%) 46.9% 47.0% 48.7% Total functional costs (107.1) (100.0) (100.7) Amortization of intangible assets from acquisition (5.3) (5.1) (5.0) Othe

  22. Slide 22: Growth Analysis - Net Revenue

    GROWTH ANALYSIS - NET REVENUE Actual H1/2010 Organic FOREX Divestment Actual H1/2011 Δ 2011/2010 @ Act 2010 FX growth translation (in CHFm) @ Act 2011 FX (in %) (in CHFm) (in %) (in %) (in CHFm) Wireless Solutions 138.2 5.2% -9.4% n/a 132.4 -4.2% Network Testing 80.1 -0.2% -8.7% -2.7 70.3 -12.2% Sec

  23. Slide 23: Illustrative Example of FX Impacts

    ILLUSTRATIVE EXAMPLE OF FX IMPACTS Local books in SEK: H1/2010: USD 10.0m = SEK 74.1m US customer H1/2011: USD 10.0m = SEK 63.6m Transaction FX impact of -14.2% Contract with customer: Sale of handsets for USD 10.0m Translation of the SEK P&L into CHF: H1/2010: SEK 74.1m = CHF 10.8m Ascom H1/2011: S

  24. Slide 24: Impact from Foreign Exchange Rates Fluctuation

    IMPACT FROM FOREIGN EXCHANGE RATES FLUCTUATION CHFm Wireless Network Testing Security Total Group Solutions Communication Net revenue Transaction FX impact* (2.7) (4.1) n/a (6.8) Translation FX impact* (13.0) (6.9) (1.1) (21.0) TOTAL FX impact on NR (15.7) (11.0) (1.1) (27.8) EBITDA Transaction FX i

  25. Slide 25: EBITDA Development of Network Testing

    EBITDA DEVELOPMENT OF NETWORK TESTING (in CHFm) 12.3 -3.4 -1.0 -3.8 1.3 5.4 2011 Half-Year Results, 18/08/2011 © Ascom Group 25

  26. Slide 26: Details on Net Financial Result for the Period

    DETAILS ON NET FINANCIAL RESULT FOR THE PERIOD 2 (in CHFm) 0.7 0.0 0 -0.7 -0.2 -1.5 -1.5 -1.9 Interest expenses and income -2 (net) -3.0 -3.6 Profit and loss on FX -4 revaluations (net) Bank charges & commissions -6 FX losses from EQ-like loans -8 due to liquidation -8.7 Net financial result for the

  27. Slide 27: Pro Forma Income Statement: Security Communication as Discontinued Operation

    PRO FORMA INCOME STATEMENT: ASCOM GROUP WITH SECURITY COMMUNICATION AS DISCONTINUED OPERATION CHFm 1st half 2011 Revenue 202.5 Gross profit 106.3 Gross margin (%) 52.5% Total functional costs (88.1) Amortization of intangible assets from acquisition (5.0) Other income/(expenses), net 3.2 EBIT 16.4 N

  28. Slide 28: Consolidated Balance Sheet

    CONSOLIDATED BALANCE SHEET 31.12.2010 30.6.2011 CHFm % CHFm % Intangible assets 221.5 38.1 203.9 40.2 Other non-current assets 39.9 6.9 40.9 8.1 Non-current assets 261.4 45.0 244.8 48.3 Cash and cash equivalents 129.0 22.2 80.4 15.9 Other current assets 189.9 32.8 181.3 35.8 Total assets 580.3 506.5

  29. Slide 29: Development of Shareholders' Equity

    DEVELOPMENT OF SHAREHOLDERS‘ EQUITY (in CHFm) 200 9.0 -8.7 195 190 189.0 -10.9 185 180 3.3 181.7 175 170 165 Balance at Group profit for Dividends paid Currency Other items Balance at 31.12.2010 the period translation 30.6.2011 adjustments 2011 Half-Year Results, 18/08/2011 © Ascom Group 29

  30. Slide 30: Pro-Forma Balance Sheet: Security Communication as Discontinued Operation

    PRO-FORMA BALANCE SHEET: ASCOM GROUP WITH SECURITY COMMUNICATION AS DISCONTINUED OPERATION 30.6.2011 CHFm % Intangible assets 203.7 40.2 Other non-current assets 31.0 6.1 Non-current assets 234.7 46.3 Cash and cash equivalents 75.5 14.9 Other current assets 141.0 27.9 Assets held for sale 55.3 10.9

  31. Slide 31: Consolidated Statement of Cash Flows

    CONSOLIDATED STATEMENT OF CASH FLOWS 1st half-year 1st half-year CHFm 2010 2011 Net cash flow from operating activities 21.7 1.3 Net cash flow from investing activities (6.7) (3.5) Net cash flow from financing activities (27.7) (43.4) Net decrease in cash and cash equivalents (15.3) (48.6) Cash and

  32. Slide 32: Highlights from the Divisions

    [ ] HIGHLIGHTS FROM THE DIVISIONS 2011 Half-Year Results, 18/08/2011 © Ascom Group 32

  33. Slide 33: Wireless Solutions: When Every Second Counts

    [ ] WIRELESS SOLUTIONS WHEN EVERY SECOND COUNTS 2011 Half-Year Results, 18/08/2011 © Ascom Group 33

  34. Slide 34: Wireless Solutions - Very Good Results

    WIRELESS SOLUTIONS – VERY GOOD RESULTS  Increasing revenue Organic growth of 5.2%  Strong profitability EBITDA increased by 10.5% on a currency-adjusted basis  All three sales channels performed well  Direct channel sales grew overall with a very strong performance in the US  OEM business grew

  35. Slide 35: Wireless Solutions - Focus Second Half-Year

    WIRELESS SOLUTIONS – FOCUS SECOND HALF-YEAR 1 FURTHER INVESTMENT IN SALES CHANNELS  US  International sales partners (Dubai, Spain, Southern & Eastern Europe) 2 PREPARE FOR FURTHER INORGANIC GROWTH  Integration of Miratel in Finland  Evaluation of further acquisition targets (mainly companies wi

  36. Slide 36: Network Testing: Evolving Networks. Trusted Solutions.

    [ ] NETWORK TESTING EVOLVING NETWORKS. TRUSTED SOLUTIONS. 2011 Half-Year Results, 18/08/2011 © Ascom Group 36

  37. Slide 37: Network Testing - Challenging Environment

    NETWORK TESTING – CHALLENGING ENVIRONMENT  Revenue development stable (adjusted for FX and divestment effects) and thus in line with company’s guidance and industry forecast  North America showed ongoing growth  Rebound in business in emerging market regions (e.g. South East Asia, Central & South

  38. Slide 38: Network Testing - Focus Second Half-Year

    NETWORK TESTING – FOCUS SECOND HALF-YEAR 1 ASSURE STRONG SECOND HALF-YEAR  Convert strong sales funnel into revenue  Further development of sales organization  Further improvement of cost position 2 BENEFITING FROM INVESTMENTS IN EMERGING TECHNOLOGIES  Expansion of support for emerging technolog

  39. Slide 39: Security Communication: Serving Customers Anywhere, at Any Time

    [ ] SECURITY COMMUNICATION SERVING CUSTOMERS ANYWHERE, AT ANY TIME 2011 Half-Year Results, 18/08/2011 © Ascom Group 39

  40. Slide 40: Security Communication - In Line with Expectations

    SECURITY COMMUNICATION – IN LINE WITH EXPECTATIONS  Security Communication developed according to expectations  Substantial orders secured, however overall Swiss defense business decreased due to its cyclical nature  Position on the Swiss market further consolidated  Improvement in profitability

  41. Slide 41: Looking Forward

    [ ] LOOKING FORWARD 2011 Half-Year Results, 18/08/2011 © Ascom Group 41

  42. Slide 42: Starting from a Very Good 2010: 2011 First Step

    STARTING FROM A VERY GOOD 2010: 2011 FIRST STEP TO ACHIEVE 1st priority INVESTMENTS LEVEL RESULTS 2011 PLAN Wireless Solutions Wireless Solutions  New products  Continued growth and preparing  New applications for accelerated growth and  New markets and channels profitability  M&A Network Testi

  43. Slide 43: Outlook 2011

    OUTLOOK 2011  Financial targets for 2011 (continuing operations)*: Wireless Solutions: slight revenue growth Revenue growth Network Testing: stable EBITDA margin 13-14% at Group level  Financial medium-term targets for 2013 (continuing operations)*: Revenue growth 5-10% Targets 2012 and 2013 EBITD

  44. Slide 44: Initiated Investments to Support Value Increase

    INITIATED INVESTMENTS TO SUPPORT VALUE INCREASE  Ascom is well positioned in growth businesses with a clear focus on innovative products, systems, solutions and services  EBITDA margin target for 2011 increased to 13-14% (continuing operations)  Solid balance sheet with surplus liquidity and impr

  45. Slide 45: Group Contact

    [ ] GROUP CONTACT Ascom Holding AG Investor Relations T +41 31 999 11 11 Stettbachstrasse 6 F +41 44 823 13 21 CH-8600 Dübendorf [email protected] │ www.ascom.com 2011 Half-Year Results, 18/08/2011 © Ascom Group 45

  46. Slide 46: Legal Disclaimer

    LEGAL DISCLAIMER This document contains specific forward-looking statements, e.g. statements including terms like “believe”, “expect” or similar expressions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may result in a substantial dive

  47. Slide 47: Thank You!

    THANK YOU! 2011 Half-Year Results, 18/08/2011 © Ascom Group 47

Ascom Holding — H1 2011 Earnings Presentation on 6ix