Ascom Holding Ag · SIX:ASCN
Ascom — FY2013 Earnings Presentation
59 slides from Ascom's earnings presentation, March 2014
Slide 1: Welcome to the Ascom Media and Analyst Conference 2013 Annual Results
WELCOME TO THE ASCOM MEDIA AND ANALYST CONFERENCE 2013 ANNUAL RESULTS 1
Slide 2: Ascom
ASCOM MISSION-CRITICAL WIRELESS COMMUNICATION WORK-FLOW OPTIMIZATION IN HEALTHCARE TRUSTED PARTNER FOR WIRELESS NETWORK INVESTMENT AND MANAGEMENT 2
Slide 3: 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
Slide 4: The Executive Board
THE EXECUTIVE BOARD CLAES ÖDMAN RIKARD LUNDQVIST BIANKA WILSON FRITZ MUMENTHALER GENERAL MANAGER GENERAL MANAGER CHIEF FINANCIAL OFFICER CHIEF EXECUTIVE OFFICER WIRELESS SOLUTIONS NETWORK TESTING Fritz Mumenthaler Bianka Wilson Claes Ödman Rikard Lundqvist Ascom Annual Media Conference 2014 4
Slide 5: Agenda March 2014
[ ] AGENDA 5 MARCH 2014 Review 2013 2013 Financial Results Ascom Wireless Solutions Ascom Network Testing Outlook Ascom Annual Media Conference 2014 5
Slide 6: Review 2013
[ ] REVIEW 2013 FRITZ MUMENTHALER Ascom Annual Media Conference 2014 6
Slide 7: Ascom Achievements 2013
ASCOM ACHIEVEMENTS 2013 1 DELIVERED ON STRATEGY – BUILT THE BASE FOR FUTURE GROWTH 2 DELIVERED ON OPERATIONAL EXCELLENCE 3 FINANCIAL KPI’S SUBSTANTIALLY IMPROVED Ascom Annual Media Conference 2014 7
Slide 8: Delivered on Strategy – Built the Base for Future Growth
ASCOM ACHIEVEMENTS 2013 DELIVERED ON STRATEGY – BUILT THE BASE FOR FUTURE GROWTH Realized strong growth in incoming orders and order backlog Expanded foot-print in the healthcare segment (Wireless Solutions Division) Leveraged leading market position in EMEA and Americas (Network Testing Division
Slide 9: Delivered on Operational Excellence
ASCOM ACHIEVEMENTS 2013 DELIVERED ON OPERATIONAL EXCELLENCE Achieved again a high EBITDA margin in Wireless Solutions Sustained the turnaround in Network Testing Streamlined and adjusted the Head Office Completed the last step towards an asset-light Ascom Ascom Annual Media Conference 2014 9
Slide 10: Financial KPIs Substantially Improved
ASCOM ACHIEVEMENTS 2013 FINANCIAL KPI’S SUBSTANTIALLY IMPROVED Delivered EBITDA of 15.7% in the core business Delivered Group profit of CHF 36.9 million (PY CHF 21.8 million) Delivered strong operating cash flow of CHF 63.3 million Reduced net debt to CHF 2.9 million (PY CHF 41.3 million) Incre
Slide 11: Ascom Wireless Solutions
ASCOM WIRELESS SOLUTIONS Solution provider for work-flow optimization in healthcare Finalized integration of GE Nurse Call; further leverage of patient systems business initiated Strengthened and broadened its strategic position in the attractive healthcare market through strategic wins Realiz
Slide 12: Ascom Network Testing
ASCOM NETWORK TESTING Trusted partner in wireless network investment and management Leveraged its global #1 market position to expand its business in EMEA and in the Americas Commitment to innovation resulted in a leading position in VoLTE, a unique offering in Test & Measurement (iPhone testing
Slide 13: 2013 Financial Results
[ ] 2013 FINANCIAL RESULTS BIANKA WILSON Ascom Annual Media Conference 2014 13
Slide 14: Significant Achievements in 2013
SIGNIFICANT ACHIEVEMENTS IN 2013 Ascom Incoming order growth of 9.5% Group Revenue growth of 2.2% Increased EBITDA margin to 14.7% (PY 10.9%) Profit of CHF 36.9m (PY CHF 21.8m) Core Incoming order growth of 10.6% business1) Revenue growth of 2.7% EBITDA margin of 15.7% Wireless Incom
Slide 15: Growth Analysis
GROWTH ANALYSIS CHFm 2012 Organic FX Inorganic 2013 ∆ 13/12 Incoming orders Wireless Solutions 296.1 2.7% 0.9% 4.0% 318.7 7.6% Network Testing 118.6 17.7% - - 139.6 17.7% Core business1) 414.3 7.0% 0.7% 2.9% 458.1 10.6% Other 22.1 2.1% 0.1% -12.0% 19.9 -9.8% Ascom Group 436.4 6.8% 0.6% 2.1% 478.0 9.
Slide 16: Revenue by Region / Key Country
REVENUE BY REGION / KEY COUNTRY (Based on location of customer) 69 69 54 58 47 44 91 NL CH DE 83 US 345 336 101 95 19 14 EMEA APAC Americas Corporate / division headquarter 2013 Subsidiary or branch 2012 Acquired 2 January 2014 Key country = > 10% of Group revenue Ascom Annual Media Conference 2014
Slide 17: Core Business in Focus
CORE BUSINESS IN FOCUS Most dilutive non-core activities will discontinue end 2015 Core business1) Other CHFm 2012 2013 2012 2013 Incoming orders 414.3 458.1 22.1 19.9 Revenue 427.8 439.2 22.0 20.5 Gross profit / (loss) 215.9 228.3 1.2 (1.2) Gross margin (%) 50.5% 52.0% 5.5% n/a EBIT 26.2 49.4 0.3 (
Slide 18: Continued EBITDA Improvement in Core Business
CONTINUED EBITDA IMPROVEMENT IN CORE BUSINESS (CHFm) Driven by volume increase and savings Wireless Solutions Network Testing 1.4 - 1.1 - 1.2 0.4 11.8 -2.0 2.7 17.9 4.3 -0.5 53.1 11.6 -4.6 48.2 EBITDA Restruct. Savings Volume Margin Others EBITDA EBITDA Volume Margin Func. One-offs Others EBITDA 201
Slide 19: Significant Impact of H1/H2 Seasonality
SIGNIFICANT IMPACT OF H1/H2 SEASONALITY (CHFm) H2 delivers higher revenue and better profitability 200 10060.0% 70.0% Wireless Solutions Network Testing 60.0% 50.0% 53.0% 55.7% 55.4% 50.0% 50.5% 50.9% 52.7% 49.1% 40.0% 40.0% 41.0% 30.0% 15.0% 20.0% 150 30.0% 10.3% 11.8% 20.5% 10.0% 17.3% 20.0% 15.0%
Slide 20: EBITDA to Group Profit Reconciliation
EBITDA TO GROUP PROFIT RECONCILIATION (CHFm) 38% EBITDA increase leads to nearly 70% higher Group profit - 20.0 - 1.9 - 3.1 - 1.0 - 4.7 67.6 36.9 EBITDA 2013 Depreciation / Net FX losses Net interest Other financial Income tax Group profit 2013 amortization expenses expenses Ascom Annual Media Confe
Slide 21: Tax Bridge
TAX BRIDGE (CHFm) Significant tax reduction due to tax loss carry-forwards 2.1 2.5 -8.5 10.5 -1.9 4.7 Expected income tax Effect of income/ Net effect from Net effect from tax Other effects Income tax expenses expenses 2013 expenses taxed with deferred tax loss carry-forwards 2013 a different rate o
Slide 22: Excellent Cash Generation
EXCELLENT CASH GENERATION (CHFm) Strong cash generation enables balance sheet efficiency - 11.3 20.9 - 8.6 - 12.2 - 9.0 67.6 -42.9 - 12.2 2.8 63.1 58.2 Cash at EBITDA NWC Provision CapEx Acquisition Interest and Debt related Dividend / Other cash Cash at 1.1.2013 improvement related cash tax payment
Slide 23: Improved Balance Sheet Efficiency
IMPROVED BALANCE SHEET EFFICIENCY (CHFm) Enables future priorities for capital allocation Net working capital (NWC) Net debt and Equity ratio 120 120 101.2 80 80.3 70 20 32% 52% 40 -30 0 -80 -40 2012 2013 -130 Trade receivables Inventories 2012 2013 Trade payables Customer prepayments Cash and equiv
Slide 24: Return to Shareholders
RETURN TO SHAREHOLDERS (CHFm, except per share data) Demonstrated commitment to consistent cash return Earnings per share (EPS) Dividends Pay-out ratio: 37% 56% 39% Proposed 1.07 14.4 12.2 0.64 8.6 2012 2013 2011 2012 2013 Note: Distribution per share in the following year based on prior year’s prof
Slide 25: Ascom Group 2013 in Summary
ASCOM GROUP 2013 IN SUMMARY Expanded international market leadership Global presence Revenue in 17 Countries CHF 459.7m Customer ROI at the core of our work US Gross 20% Maintained strategic focus of Group margin revenue 49.4% Solid balance sheet EBITDA Total CHF 67.6m Asset light strategy Assets CH
Slide 26: 2014 CFO Priorities
2014 CFO PRIORITIES 1 Enable growth initiatives 2 Continue focus on financial and operational excellence 3 Active investor relations 4 Provide transparency Ascom Annual Media Conference 2014 26
Slide 27: Ascom Wireless Solutions
[ ] ASCOM WIRELESS SOLUTIONS CLAES ÖDMAN Ascom Annual Media Conference 2014 27
Slide 28: 2013 – Highlights
2013 – HIGHLIGHTS Focus segment healthcare grew by 6% in revenue > now 56% of divisional revenue Service business grew 6% Strong performance of software business Integration of GE Nurse Call concluded > Achieved strong growth in nurse call in US Global Product Lines implemented > Mobility,
Slide 29: Recent M&A
RECENT M&A 2 January 2014 - Ascom Wireless Solutions closed the acquisition of Integrated Wireless, a specialized provider of emergency wireless communication systems and workflow solutions in Australia. Mirrors strategic focus, with 70% of revenue in healthcare and elderly care Enables direct a
Slide 30: Customer Return on Investment – At the Core of Our Business
CUSTOMER RETURN ON INVESTMENT – AT THE CORE OF OUR BUSINESS „Sampson Regional „Medstar Franklin Square „The ROI at Children‘s Medical Center (US): Medical Center (US): Hospital of Philadelphia: Annual savings of USD [Ascom lets] the human reduced overhead 261,923 or 9,944 hours process drive the pag
Slide 31: Growth Initiatives – Our Focus 2014 and Beyond
GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND Develop SW business Nurse call globalization Service expansion Growth market focus OEM market share Next generation smart device Ascom Annual Media Conference 2014 31
Slide 32: Growth Initiatives: Develop SW Business
GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND Develop SW business Accelerate sales of software portfolio • For example: Nurse call globalization • Dedicated SW sales experts • GE patient monitoring sales Service expansion partnership • Smartphone client Growth market focus OEM market share Next gen
Slide 33: Growth Initiatives: Nurse Call Globalization
GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND Develop SW business Introduce Ascom Nurse Call into new markets, and grow nurse call market share in existing Europe Nurse call globalization • For example: Service expansion • Introduce European wireless nurse call system into US elderly care market Gr
Slide 34: Growth Initiatives: Service Expansion
GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND Develop SW business Develop Services into a business in its own right Nurse call globalization • For example: • Increased professional services Service expansion through larger and more complex deals • Dedicated service sales experts Growth market focus
Slide 35: Growth Initiatives: Growth Market Focus
GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND Develop SW business Continue building Ascom presence in growth markets – Middle East and Asia Nurse call globalization • For example: • Introduce full Ascom portfolio into Service expansion Australian market – Integrated Wireless acquisition • Build fro
Slide 36: Growth Initiatives: OEM Market Share
GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND Develop SW business Increase market share with OEM partners Nurse call globalization • For example: • Projects to ramp up new OEM Service expansion customers • Jointly push large projects Growth market focus OEM market share Next generation smart device
Slide 37: Growth Initiatives: Next Generation Smart Device
GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND Develop SW business Truly purpose-built device with workflow intelligent software Nurse call globalization • For example: • User experience specialists shadow Service expansion nurses globally • Interviews with stake holders and decision makers in the h
Slide 38: Wireless Solutions – Strategic Transition
WIRELESS SOLUTIONS – STRATEGIC TRANSITION Yesterday Today Tomorrow Global leader in healthcare workflow Product House for System House for on Solutions Provider and communications dedicated on site site mobility and nurse for point of care workflow mobility. call. optimization in Market Global p
Slide 39: Ascom Network Testing
[ ] ASCOM NETWORK TESTING RIKARD LUNDQVIST Ascom Annual Media Conference 2014 39
Slide 40: 2013 – Highlights
2013 - HIGHLIGHTS Returned to growth Incoming orders: +17.7% Revenue: +2.2% Restructuring completed CHF 20 million savings realized 17.1% reduction of functional costs 8.3pp improvement in gross margin Broad portfolio provided strategic advantage Achieved leading position for Voice
Slide 41: Customer Return on Investment – At the Core of Our Business
CUSTOMER RETURN ON INVESTMENT – AT THE CORE OF OUR BUSINESS „European customer „US customer reduced „During single site monitors quality of time spent on cluster verification, US customer experience 24x7 in live optimization from 3-4 saved 30-50% of time use to earn more revenue hours to 1-1.5 hours
Slide 42: Growth Initiatives
GROWTH INITIATIVES Capacity Blixt™ Management Licensing Managed App & Service Services Benchmarking Ascom Annual Media Conference 2014 42
Slide 43: Capacity Management
CAPACITY MANAGEMENT Radio Access Network makes up ~ 65% of a wireless operators total CAPEX Just-in-time approach improves RAN CAPEX efficiency by ~ 35% When to expand Capacity limits What specific network elements have reached their limits 43 Ascom Annual Media Conference 2014 43
Slide 44: Blixt™ - What Is It?
BLIXT™ - WHAT IS IT? Available Bandwidth Measurement (ABM) Technology Faster and less intrusive than old methods Providing simultaneous measurement of upload, download and delay More than 90% bandwidth savings compared to old methods 2 iTunes or App Radio Store Benefits of Blixt™ Network Cor
Slide 45: Blixt™ - Winner of an Innovation Award
BLIXT™ - WINNER OF AN INNOVATION AWARD Winner of 2013 Fierce Innovation Awards: Telecom Edition Unique operator-reviewed awards program from the publishers of FierceWireless, FierceTelecom, and FierceCable Executives from AT&T, Cablevision System Corporation, Comcast, Cox Communications, Metro
Slide 46: Blixt™ - Licensing Opportunity
BLIXT™ - LICENSING OPPORTUNITY Network • Visibility into customer experience Operators • Customer engagement – customer care Smartphone • Improved battery life • Reduce app/service frustration – improve OEMs customer experience • Embed test functionality for greater App & Service network awareness P
Slide 47: Managed Services
MANAGED SERVICES Wireless performance data: • Collected by smartphones • Transmitted to server • Automatically processed • Presented on dashboard & map On a site hosted and managed by Ascom in the cloud. Ascom Annual Media Conference 2014 47
Slide 48: Managed Services – Multinational Deployment
MANAGED SERVICES – MULTINATIONAL DEPLOYMENT Ascom Annual Media Conference 2014 48
Slide 49: Application & Service Benchmarking
APPLICATION & SERVICE BENCHMARKING Metrics: IMS Viewing Interruptions Data Messaging Voice Video Quality Average MOS-V Score 5 Typical Usage 4 3 Monitoring 2 1 Trouble-shooting 0 A‐LTE B‐LTE C‐WCDMA D‐EVDO E‐WCDMA F‐EVDO Regression testing Benchmarking Ascom Annual Media Conference 2014 49
Slide 50: 2014 - Focus
2014 - FOCUS Recovery of Asia / Pacific business > Measures already initiated Expanding analytics & services business Solutions-selling expansion outside of North America New offerings with Blixt™ licensing, Capacity & eContracts Management More favorable product mix and improved operation
Slide 51: Network Testing - Strategic Transition
NETWORK TESTING - STRATEGIC TRANSITION Yesterday Today Tomorrow Global leader in network performance Trusted partner assurance Independent Technology leader in wireless auditor of wireless Market Trusted brand with in wireless network network network positioning CxO visibility, drive testing too
Slide 52: Outlook
[ ] OUTLOOK FRITZ MUMENTHALER Ascom Annual Media Conference 2014 52
Slide 53: Outlook: Starting Point
OUTLOOK STARTING POINT Organic growth 2014 supported by increased order backlog Acquisition of Integrated Wireless (Australia) contributes to inorganic growth Concrete growth initiatives in both divisions Ascom Annual Media Conference 2014 53
Slide 54: Outlook Core Business
OUTLOOK CORE BUSINESS Targets 2014* • Target growth: 5-10% (organic and inorganic growth) • Target EBITDA margin: 15-16% Targets 2015* • Target growth: 5-10% (organic and inorganic growth) • Target EBITDA margin: 16-17% * Outlook assumes a steady economical environment and at least stable currency r
Slide 55: 2014 Priorities for Capital Allocation
2014 PRIORITIES FOR CAPITAL ALLOCATION Focus on healthy, sustainable shareholder return Steady organic growth leading to increased return Smart bolt-on acquisitions Continued investment in innovation and technology leadership Sustainable dividend Ascom Annual Media Conference 2014 55
Slide 56: Shareholders – Higher Dividend Payment
SHAREHOLDERS – HIGHER DIVIDEND PAYMENT Proposal to the Annual General Meeting of 1 April 2014: Distribution of CHF 0.40 per share Total distribution of 14.4 CHF million Pay-out ratio of 39% Ascom Annual Media Conference 2014 56
Slide 57: Q&A
[ ] Q&A Ascom Annual Media Conference 2014 57
Slide 58: Group Contact
[ ] GROUP CONTACT Ascom Holding AG Corp. Communications / IR Tel: + 41 41 544 78 00 Zugerstrasse 32 Fax: + 41 41 761 97 25 6340 Baar [email protected] Ascom Annual Media Conference 2014 58
Slide 59: Thank You
THANK YOU Ascom Annual Media Conference 2014 59