Rtx A/s · OMXCOP:RTX
Rtx A/s — RTX Telecom — Investor Presentation (December 2002)
59 slides from Rtx A/s's investor presentation, December 2002
Slide 1: RTX Telecom Company Presentation based on 2001/02 results
RTX Telecom Jørgen Elbæk CEO [email protected] Company Presentation based on 2001/02 results December 2002 Stroemmen 6 DK9400 Noerresundby Aalborg, Denmark www.rtx.dk
Slide 2: RTX Telecom mission
RTX Telecom mission “to be the preferred partner in the development of advanced wireless communication IP and solutions” “RTX INSIDE”: (Chips, HW & SW) Present Technology Focus: DECT, 2.4GHz FHSS Cordless Phones BluetoothTM IS-95, cdma2000 1x GSM/GPRS/UMTS TD-SCDMA (3GPP: LCR TDD) IEEE 802.11a/b/g
Slide 3: RTX Wireless Universe
RTX Wireless Universe GPRS EDGE GSM UMTS NMT Cellular networks 450 W-WAN CDMA 2000 TD-SCDMA 2.4GHz HomeRF? Digital 5.4GHz DECT Cordless and Digital Local Networks IEEE W-LAN 802.11b IEEE HiperLAN? 802.11a BluetoothTM Personal Networks W-PAN “RTX is well prepared for the integration of voice and data
Slide 4: Facts
Facts Founded 1993 246 employees Listed on the Copenhagen Stock Exchange 2000 11,300 m² Head office, Aalborg Two other locations in Denmark Sales representatives in USA and South Korea Wireless, HealthCare, Industry and Biotech W-PAN, W-LAN and W-WAN Average telecom experience 9 years
Slide 5: Important Notice
Important Notice This presentation contains statements regarding expectations for the future development of RTX Telecom A/S (“RTX Telecom” or the “Company”), in particular the direction of future product development, future sales, operating profits and business expansion. Such statements are subject
Slide 6: Agenda
Agenda: Fiscal year 2001/02, general / RTX Telecom Highlights 2001/02 RTX Telecom, Strategies, Technologies and Markets 2001/02 in numbers Outlook 2002/03
Slide 7: Fiscal Year 2001/02
Fiscal Year 2001/02 General: A difficult year for the industry The general improvement hoped for late in the fiscal year did not really materialize Investment decisions are still difficult to make Budgets for new innovative products are limited No real time pressure on decisionmakers RTX Telecom: A
Slide 8: Highlights Fiscal 2001/02
Highlights Fiscal 2001/02 Net turnover : DKK 207.6 mio. + 18.1% (175.9 mio. last year ) EBIT : DKK 11.2 mio. ( -21.9 mio. last year ) Successful return to profits in a difficult market CDMA business area revived by the creation of VIA Telecom RTX Telecom’s entry into the GSM/GPRS business area seale
Slide 9: Development in Sales and EBIT
Sales and EBIT Development Development in Sales and EBIT 120 100 80 Million DKK 60 Sales 40 EBIT 20 0 H1 H2 H1 H2 H1 H2 H1 H2 -20 1998/99 1999/00 2000/01 2001/02 -40 Fiscal Pe riod
Slide 10: Employees
Employees 250 30 28 225 26 200 Number of employees 24 22 175 20 150 18 16 125 14 100 12 10 75 8 50 6 4 25 2 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 Years of experience within Number of
Slide 11: Technologies, Partners and Customers
Technologies, Partners and Customers DECT Bluetooth CDMA GSM/GPRS 802.11a TD-SCDMA National SC National SC VIA Telecom Motorola Semi. Resonext xxxxx / yyyyy RTX Telecom Leverage in R&D Product Companies Ericsson, Panasonic, VTech, AT&T, GN Netcom, B&O, Siemens, Agilent, Kirk, Pace…. “Wireless resour
Slide 12: RTX Main Technologies (WLAN / WPAN)
RTX Main Technologies RTX Main Technology and Activity Focus (WLAN / WPAN): DECT / Cordless 2.4 GHz - IP Development (DECT – GAP/CAP - DPRS, WDCT protocols) - Design Services IC-partner: National Semiconductor - OEM Product Bluetooth - IP Development (Bluetooth Core, Bluetooth - Upper & Lower Stack,
Slide 13: RTX Main Technologies (WWAN)
RTX Main Technologies RTX Main Technology and Activity Focus (WWAN): GSM / GPRS - IP Development (MMI XFC Engine) - Design Services IC-partner: Motorola Semiconductor CDMA IS-95 / CDMA2000 - Design Services IC-partner: Via Technologies (Via Telecom) TD-SCDMA - IP Development (TSM Core, Layer1 sw) -
Slide 14: Main Strategies
Main Strategies Effort concentrated on existing technology platforms (no major new technology investments) Differentiated marketing strategies for the various technology platforms More direct customer engagements Risk handling/reduction Strengthening of sales organisation Positioning against low pri
Slide 15: Focused Efforts for Existing Platforms
Focused Efforts for Existing Platforms Substantial investments made over the last 2 years in new technology platforms – now is time to sell All major wireless technologies exist now in RTX portfolio Within all technologies, RTX has committed co-operation with strong (chip) partners securing good mar
Slide 16: Differentiated strategies for each technology platform
Differentiated strategies for each technology platform The different technologies service different markets and thereby requires different marketing and sales approaches - Telecom IT - Home business - Brand marketing ODM manufacturing Various technology life cycle stages requires different business
Slide 17: DECT - The Market
DECT - The Market Estimated total market volume: 35 Mio units The DECT market is stable with low growth Recession in Telecom in general has lead to a number of new design houses, especially in Asia Pacific Dominated by very few brand names (2001) Cordless market Other Ascom Siemens Panasonic Philips
Slide 18: 2.4GHz - The Market
2.4GHz - The Market The 2.4GHz market has shown strong growth in the US A number of US brand names “shop” for solutions in Asia The US brands are not loyal and will turn to a new design to save a few cents in cost – i.e. royalty business preferred by suppliers. The 2.4GHz ISM band is used for a larg
Slide 19: DECT/WDCT product overview
DECT/WDCT product overview DECT / GSM 2.4GHz 2.4GHz / DECT 2.4GHz DECT 2.4GHz / DECT
Slide 20: Strategies on Cordless
Strategies on Cordless DECT - RTX focus on high-tier DECT products and niche products like Headsets and Intercom 2.4 GHz - Keep lead on technology - Modular concept has proven its worth for high volume customers – flexible and low development risk - Test equipment is an important project catalyst an
Slide 21: Bluetooth - The Market
Bluetooth - The Market Bluetooth is the de facto wireless standard for portable devices – PDA’s and mobile phones Everybody is fighting fiercely for market share and survival Chip suppliers are eager to get design wins ⇒ Low NRE Killer application is for the time being cellular handsets and accompan
Slide 22: Bluetooth
Bluetooth RTX Core Bluetooth Business Model Development of IP (licensed to Nat.Semi.) Design Services OEM Products (Communication Tester to Agilent). Areas of special competence RTX IP: Core, Lower & Upper Stack, All profiles System Engineering Integration of SW / HW / RF Audio / voice / low power /
Slide 23: Strategies on Bluetooth
Strategies on Bluetooth RTX keeps focus on being the leading Bluetooth audio design company: headsets, car-kits, stereo headsets, combo headset/ USB-dongle More intensive focus on selling and winning Bluetooth designs - be the innovative partner for Bluetooth development Support National Semiconduct
Slide 24: GSM/CDMA - The Market
GSM/CDMA - The Market UMTS moving very slowly in Europe – some operators pulling out Total cellular market will not grow substantially for the next 4 years But the number of designs will grow rapidly as entry barrier is lowered and carriers start branding OEM products Many new applications will need
Slide 25: GSM/CDMA Competition
GSM/CDMA Competition Orig. Design Manufacturers (ODM) (BenQ, Compal, Sewon, …) - potentially believed to supply 50% of all handsets in 2-3 years time - synergies internally between R&D, manufact. and after sales service - only interested if production is a part of the delivery - ...but manufacturing
Slide 26: IS-95A/B - CDMA2000 1x Platform
IS-95A/B - CDMA2000 1x Platform Compactobject Compact objectoriented orientedMMI MMIthat thatisisvery very easyto easy tocustomize customize TheRTX The RTXCDMA2000 CDMA2000platform platformshows showsvery very DEVELOPMENT TARGETS: goodRF good RFperformance performanceininpre-CDG1 pre-CDG1test. test.
Slide 27: RTX i.250 GSM/GPRS Platform
RTX i.250 GSM/GPRS Platform DEVELOPMENT TARGETS: Dual Band 900/1800 or 850/1900 MHz Talk-time 5,0 hours Standby-time 325 hours Bill of material < 45 US$ Size < 75 ccm Weight < 85 g No. of components app. 175 No. of RF-chips 1 + PA No. of BB-chips 2 + Mem Bluetooth 1 PCB 6 Layer Launch 2002 Key compo
Slide 28: GSM Experience of RTX Employees
GSM Experience of RTX Employees A big part of the SW and HW in these handsets has been developed by engineers now working at RTX. Incl. R&D and project management, RF, SW and baseband development First Customer Contract based om Motorola Chipset announced August 2002 ”More than half the RTX GSM team
Slide 29: RTX cellular activities - overview
RTX cellular activities - overview XFC – MMI framework Cellular Manufacturing Solution Industrial Design and Mechanical design (via partner) TD-SCDMA CDMA2000 GSM/GPRS NMT ”RTX is mastering the full range of cellular technologies, including all peripheral solutions in order to offer design services
Slide 30: RTX Application Technologies
RTX Application Technologies WAP u-browser Bluetooth Understudy: Under study: Handsfree Acoustics W-LAN USB ••Game GameEngine Engine Multi-Media ••3D 3DGraphics Graphics Colour Graphic Messaging ••Pocket PocketPC PC2002 2002 MMI Services AOL/Tegic SyncML T9 Text input MPEG4 J2ME Video (Java) compres
Slide 31: Strategies on GSM/CDMA
Strategies on GSM/CDMA RTX shall take advantage of being an end-to-end design house State of the art applications – Color display & Multi-media messaging Plastic design via partnership with Vertical Products in Austria Complete manufacturing setup via RTX Cellular Manufacturing Solutions Piggy-back
Slide 32: W-LAN - The Market
W-LAN - The Market Users want wireless access and fast connections The 802.11a/b/g products are very price-sensitive (Taiwan) LAN standards suffer from lack of standardisation on applications – it is essentially an IP network and not much more Short-term W-LAN is just a cable replacement and mobilit
Slide 33: WLAN / IEEE802.11
WLAN / IEEE802.11 802.11 is a high performance wireless LAN technology (speed up to 54 Mbps) RTX Core 802.11 Business Model Design Services OEM Products? RTX is developing reference platform and design kits for 802.11a and 802.11b/a (PC Card and Access Point) RTX will offer design services to enable
Slide 34: Strategies on W-LAN
Strategies on W-LAN Keep close links to Resonext and develop their reference designs and production test equipment Focus on home entertainment networks with a high Quality of Service for Video and Audio (niche strategy) Differentiation Strategy: Combine W-LAN and cordless phone technology for VoIP a
Slide 35: RTX TD-SCDMA Technology
RTX TD-SCDMA Technology RTX Boar d Lev el Int PA egrat io n TD-SCDMA GSM Chip RF RF Leve l Inte gratio n GSM TD-SCDMA BB BB Layer 1 Layer 1 Stack PCB Display Early(only) Early (only)technology technologyprovider providerfor forterminals terminals Speaker - Mic. Mic. Charger, interface Strongtechnolo
Slide 36: Why TD-SCDMA in China?
Why TD-SCDMA in China? China is entering WTO – also for telecom equipment - China needs to compete on standards to keep Western dominance out China has never been able to set the agenda in 2G - the Chinese industry has not got much experience and competitive edge - a big amount of cash has been sent
Slide 37: China will need a 3G Technology with efficient Voice Capacity
China will need a 3G Technology with efficient Voice Capacity China is a densely populated country Big need for networks with high voice-capacity “The need for extra voice capacity in China will be great when 60-70% of the Chinese population will have a mobile phone during the next 10 years. TD-SCDM
Slide 38: TD-SCDMA Status in China
TD-SCDMA Status in China MII network tests have been finished with success for TD-SCDMA UMTS has failed these tests and new tests have to be conducted MII has understood the potential of TD-SCDMA – low cost and high flexibility 155 MHz of spectrum in 2 GHz band has been allocated to TD-SCDMA by MII
Slide 39: Competition and Strategy
Competition and Strategy Philips/CECW - target is to deliver chipset, stack and ref. design during 2003 - CECW is making quite some noise in the market, but where are they really ? COMMIT: JV of 17 investors to develop chipset and stack - CATT, TI, Nokia, LGE, DBTel, … According to Siemens Philips/C
Slide 40: RTX TD-SCDMA Pre-Commercial Terminal
RTX TD-SCDMA Pre-Commercial Terminal
Slide 41: RTX GPRS/TD-SCDMA Commercial Handset
RTX GPRS/TD-SCDMA Commercial Handset GSM/GPRS/TD-SCDMA compliant TD-SCDMA GSM Direct conversion Rx and Tx PA PA Single board handset One chip GSM/TD-SCDMA Rx/Tx 90mm GSM/TD-SCDMA DEVELOPMENT TARGETS: GSM/TD-CSDMA BB & audio codec Dual mode Power Management Bill of material < 70 USD Baseband Size < 7
Slide 42: Differentiated Strategy
Differentiated Strategy Wireless MobileTalk MobileMania 3G (incl. TD-SCDMA)/ GSM/GPRS, CDMA Bluetooth -Engineered by RTX -Engineered by RTX Basic demand Advanced for talking demand for InfoCom services DECT/2.4GHz TeleYesterday IPWorld -Engineered by RTX Wired Smart Home for non-experts -Engineered
Slide 43: RTX Customers
RTX Customers RTX is capable of delivering Development Services and Turn Key Services to leading companies and brand name customers Some of them are: “Many other customers will not have their names revealed”
Slide 44: Own Products
Own Products DECT Repeater ISDN DECT terminal BluetoothTM RF Tester Possible new Product Introductions ? “RTX Telecom is a supplier of own Customer branded products within selected niche areas”
Slide 45: Profit and loss account
Profit and loss account DKKm 1997/98 1998/99 1999/00 2000/01 2001/02 Net turnover / Nettoomsætning 65.7 122.9 168.1 175.9 207.6 Cost of goods sold / Vareforbrug 0.0 30.4 45.4 49.8 35.2 Gross profit / Bruttoresultat 65.7 92.5 122.7 126.1 172.4 Staff costs / Personaleudgifter 26.6 39.9 57.1 95.0 103.0
Slide 46: Net turnover
Net turnover DKKm 2000/01 Share 2001/02 Share Development tasks 88.2 50% 101.7 49% Royalties 12.1 7% 44.1 21% Own products etc. 75.6 43% 61.8 30% Total turnover 175.9 100% 207.6 100% The main reason for the change in net turnover has been the increase of royalty income. Profit and loss account DKKm
Slide 47: Staff costs
Staff costs Average number of employees grew from 207 to 236 (14%). Staff costs increased by 8% to 103.0 MDKK. Staff costs reduced substantially in relative terms. Profit and loss account DKKm 1997/98 1998/99 1999/00 2000/01 2001/02 Net turnover / Nettoomsætning 65.7 122.9 168.1 175.9 207.6 Cost of
Slide 48: Other external costs
Other external costs Expenses increased by 6% to 48 MDKK stabilization of the organization cost control Profit and loss account DKKm 1997/98 1998/99 1999/00 2000/01 2001/02 Net turnover / Nettoomsætning 65.7 122.9 168.1 175.9 207.6 Cost of goods sold / Vareforbrug 0.0 30.4 45.4 49.8 35.2 Gross profi
Slide 49: Cash flow highlights
Cash flow highlights DKKm 1997/98 1998/99 1999/00 2000/01 2001/02 Operating profit / Resultat før renter 25.0 28.1 36.0 -21.9 11.2 Depreciation / Afskrivninger 1.8 3.1 4.5 7.4 10.0 Corporation tax paid / Betalt skat -6.9 -9.5 -9.9 -16.1 -3.6 Change in working capital / Ændring i driftskapital -5.4 1
Slide 50: Cash flow from operations
Cash flow from operations A positive amount of 40 MDKK. An increase of 58 MDKK compared to financial year 2000/01 lower money tie-ups in debtors larger financing from suppliers Cash flow highlights DKKm 1997/98 1998/99 1999/00 2000/01 2001/02 Operating profit / Resultat før renter 25.0 28.1 36.0 -21
Slide 51: Cash flow from investments
Cash flow from investments Total investments of 61 MDKK investments in participating interests 14 MDKK enlargement of RTX headquarter 37 MDKK (Phase 3) other investments 10 MDKK Cash flow highlights DKKm 1997/98 1998/99 1999/00 2000/01 2001/02 Operating profit / Resultat før renter 25.0 28.1 36.0 -2
Slide 52: Cash flow from financing
Cash flow from financing Raising of long-term loans for 20 MDKK related to enlargement of RTX headquarter in Nørresundby Cash flow highlights DKKm 1997/98 1998/99 1999/00 2000/01 2001/02 Operating profit / Resultat før renter 25.0 28.1 36.0 -21.9 11.2 Depreciation / Afskrivninger 1.8 3.1 4.5 7.4 10.
Slide 53: Balance sheet
Balance sheet DKKm 1997/98 1998/99 1999/00 2000/01 2001/02 Land and buildings / Grunde og bygninger 13.5 27.8 39.2 56.6 94.2 Other fixed assets / Øvrige anlægsaktiver 5.8 7.6 10.9 31.1 44.2 Total fixed assets / Anlægsaktiver i alt 19.3 35.4 50.1 87.7 138.4 Debtors / Debitorer 13.8 17.3 50.4 51.2 42.
Slide 54: Fixed assets
Fixed assets 6,100 square meters added to the headquarter in Nørresundby (Phase 3) Phase 3 investments of approx. 50 MDKK in 2000/01 and 2001/02 Occupancy of the new buildings took place in March 2002 Balance sheet DKKm 1997/98 1998/99 1999/00 2000/01 2001/02 Land and buildings / Grunde og bygninger
Slide 55: Debtors
Debtors Debtors: 43 MDKK, of which 35 MDKK have been paid in October and November Balance sheet DKKm 1997/98 1998/99 1999/00 2000/01 2001/02 Land and buildings / Grunde og bygninger 13.5 27.8 39.2 56.6 94.2 Other fixed assets / Øvrige anlægsaktiver 5.8 7.6 10.9 31.1 44.2 Total fixed assets / Anlægsa
Slide 56: Securities
Securities The securities include bonds with a nominal yield of 4% and a maturity of 0-2 years Balance sheet DKKm 1997/98 1998/99 1999/00 2000/01 2001/02 Land and buildings / Grunde og bygninger 13.5 27.8 39.2 56.6 94.2 Other fixed assets / Øvrige anlægsaktiver 5.8 7.6 10.9 31.1 44.2 Total fixed ass
Slide 57: Interest-bearing debt
Interest-bearing debt The enlargement of the RTX headquarter in Nørresundby is financed by new long-term mortgage loans for 35 MDKK in 2000/01 and 2001/02 Balance sheet DKKm 1997/98 1998/99 1999/00 2000/01 2001/02 Land and buildings / Grunde og bygninger 13.5 27.8 39.2 56.6 94.2 Other fixed assets /
Slide 58: Outlook 2002/03 for RTX
Outlook 2002/03 for RTX Intensive sales and marketing effort in all areas Platform enhancements in all technology areas Special focus on Cellular and TD-SCDMA Sales expectations of OEM products on level with last year Royalty income on level with 2001/02? Building investments completed Total sales e
Slide 59: Thank you for listening
Thank you for listening More info: www.rtx.dk