welcome to the ascom media and analyst … · media and analyst conference 2013 annual results 1....

WELCOME TO THE ASCOM

MEDIA AND ANALYST CONFERENCE

2013 ANNUAL RESULTS

1

ASCOM

MISSION-CRITICAL WIRELESS COMMUNICATION

TRUSTED PARTNER FOR WIRELESS NETWORKINVESTMENT AND MANAGEMENT

WORK-FLOW OPTIMIZATION IN HEALTHCARE

2

3

LEGAL DISCLAIMER

Ascom Annual Media Conference 2014

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 andunknown risks, uncertainties and other factors which may result in a substantial divergence betweenthe actual results, financial situation, development or performance of Ascom and those explicitlypresumed in these statements.

Against the background of these uncertainties readers should not rely on forward-lookingstatements. Ascom assumes no responsibility to update forward-looking statements or adapt them tofuture events or developments.

THE EXECUTIVE BOARD


Fritz Mumenthaler Bianka Wilson Claes Ödman Rikard Lundqvist

FRITZ MUMENTHALER

CHIEF EXECUTIVE OFFICER

BIANKA WILSON

CHIEF FINANCIAL OFFICER

CLAES ÖDMAN

GENERAL MANAGER

WIRELESS SOLUTIONS

RIKARD LUNDQVIST

GENERAL MANAGER

NETWORK TESTING

4

Review 2013 2013 Financial Results Ascom Wireless Solutions Ascom Network Testing Outlook

5

AGENDA 5 MARCH 2014


[ ]

FRITZ MUMENTHALER

6

REVIEW 2013


[ ]

ASCOM ACHIEVEMENTS 2013

1 DELIVERED ON STRATEGY – BUILT THE BASE FOR FUTURE GROWTH

3 FINANCIAL KPI’S SUBSTANTIALLY IMPROVED

2 DELIVERED ON OPERATIONAL EXCELLENCE

7Ascom Annual Media Conference 2014

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)

Made a bolt-on acquisition in a growth market

8



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

9



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)

Increased equity ratio to 51.6%

10



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

Realized good growth in incoming orders andin order backlog

The higher order backlog, the acquisition of Integrated Wireless, the initiated growth measures as well as further planned acquisitions will bolster profitable growth

ASCOM WIRELESS SOLUTIONS

11

Solution provider for work-flow optimization in healthcare


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 offeringin Test & Measurement (iPhone testing andBlixt) and a promising eContracts platformfor operators (Systems & Solutions)

Order backlog, initiated growth initiativesand favorable market dynamics will bolster profitable growth

ASCOM NETWORK TESTING

12

Trusted partner in wireless network investment and management


BIANKA WILSON

13

2013 FINANCIAL RESULTS


[ ]

14

SIGNIFICANT ACHIEVEMENTS IN 2013

1) Core business = Total Group minus non-core activities (segment “Other”) comprising real estate activities related to businesses disposed of in prior years


AscomGroup

Incoming order growth of 9.5% Revenue growth of 2.2% Increased EBITDA margin to 14.7% (PY 10.9%) Profit of CHF 36.9m (PY CHF 21.8m)

Core business1)

Incoming order growth of 10.6% Revenue growth of 2.7% EBITDA margin of 15.7%

Wireless Solutions

Incoming order growth of 7.6% Revenue growth of 2.8% Increased EBITDA margin to 17.3% (PY 16.2%)

Network Testing

Incoming order growth of 17.7% Revenue growth of 2.2% Increased EBITDA margin to 13.4% (PY n/a)

15

GROWTH ANALYSIS



CHFm 2012 Organic FX Inorganic 2013 ∆ 13/12Incoming ordersWireless 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 9.5%

RevenueWireless Solutions 297.7 -0.9% 0.9% 2.8% 306.1 2.8%

Network Testing 130.4 2.1% 0.1% - 133.3 2.2%

Core business1) 427.8 0.1% 0.7% 1.9% 439.2 2.7%

Other 22.0 4.4% 0.1% -11.6% 20.5 -7.2%

Ascom Group 449.8 0.3% 0.6% 1.3% 459.7 2.2%

16

REVENUE BY REGION / KEY COUNTRY

USUS

EMEAEMEA

AmericasAmericas

CHCH

APACAPAC

83

336

47

95 19

91

101

345

44

14


NLNL

69 69

DEDE

54 58

(Based on location of customer)

Corporate / division headquarterSubsidiary or branchAcquired 2 January 2014

Key country = > 10% of Group revenue

20132012

CHFmCore business1) Other

2012 2013 2012 2013Incoming orders 414.3 458.1 22.1 19.9Revenue 427.8 439.2 22.0 20.5Gross profit / (loss) 215.9 228.3 1.2 (1.2)Gross margin (%) 50.5% 52.0% 5.5% n/aEBIT 26.2 49.4 0.3 (1.8)EBIT (%) 6.1% 11.2% 1.4% n/aEBITDA 48.3 68.9 0.7 (1.3)EBITDA (%) 11.3% 15.7% 3.2% n/a

CORE BUSINESS IN FOCUS


Most dilutive non-core activities will discontinue end 2015


18

CONTINUED EBITDA IMPROVEMENT IN CORE BUSINESS


48.2

53.1

4.3-2.0

-0.52.7

0.4

EBITDA2012

Volumeimpact

Marginimpact

Func.costs

One-offs Others EBITDA2013

Wireless Solutions

-4.6

17.9

11.6

11.8

1.4 - 1.1 - 1.2

EBITDA2012

Restruct.expense

Savings Volumeimpact

Marginimpact

Others EBITDA2013

Network Testing

Driven by volume increase and savings(CHFm)

19

SIGNIFICANT IMPACT OF H1/H2 SEASONALITY


H2 delivers higher revenue and better profitability(CHFm)

141.5 156.2 149.7 156.4

53.0%49.1% 50.5% 50.9%

15.0% 17.3%14.0%

20.5%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

100

150

200

H1/2012 H2/2012 H1/2013 H2/2013

Wireless Solutions

Gross margin EBITDA margin

60.8 69.6 65.2 68.1

41.0%

52.7% 55.7% 55.4%

10.3% 11.8% 15.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

50

100

H1/2012 H2/2012 H1/2013 H2/2013

Network Testing

Gross margin EBITDA margin

20

EBITDA TO GROUP PROFIT RECONCILIATION


67.6

36.9

- 20.0

- 1.9 - 3.1 - 1.0 - 4.7

EBITDA 2013 Depreciation /amortization

Net FX losses Net interestexpenses

Other financialexpenses

Income tax Group profit 2013

38% EBITDA increase leads to nearly 70% higher Group profit(CHFm)

10.5

4.7

2.5

2.1

-8.5

-1.9

Expected income tax expenses 2013

Effect of income/ expenses taxed with a different rate or not

taxed

Net effect from deferred tax

Net effect from tax loss carry-forwards

Other effects Income tax expenses 2013


TAX BRIDGE

Significant tax reduction due to tax loss carry-forwards(CHFm)

22

EXCELLENT CASH GENERATION


63.1 58.2

67.6

20.9 - 11.3 - 8.6

- 12.2 - 9.0

-42.9

- 12.2 2.8

Cash at1.1.2013

EBITDA NWCimprovement

Provisionrelated cash

flows

CapEx Acquisition Interest andtax payments

Debt relatedcash flows

Dividend /capital

distribution

Other cashflows

Cash at31.12.2013

Strong cash generation enables balance sheet efficiency(CHFm)

23

IMPROVED BALANCE SHEET EFFICIENCY


Enables future priorities for capital allocation(CHFm)

101.2 80.3

-40

0

40

80

120

2012 2013

Net working capital (NWC)

Trade receivables InventoriesTrade payables Customer prepaymentsTotal NWC

32% 52%

-130

-80

-30

20

70

120

2012 2013

Net debt and Equity ratio

Cash and equivalents BorrowingsNet debt Equity ratio (in %)

8.6

12.2

14.4

2011 2012 2013

Dividends

24

RETURN TO SHAREHOLDERS


Demonstrated commitment to consistent cash return

0.64

1.07

2012 2013

Earnings per share (EPS)Pay-out ratio:

37% 56% 39%

Proposed

Note: Distribution per share in the following year based on prior year’s profit, i.e. dividend proposed to 2014 AGM based on the profit for the year 2013

(CHFm, except per share data)

Attractive value play after sucessful turnaround

ASCOM GROUP 2013 IN SUMMARY

RevenueCHF 459.7m

Gross margin49.4%

EBITDACHF 67.6m

FCF (excl. M&A)

CHF 56.9m

Customer ROI at the core of our work

Maintained strategic focus

Solid balance sheet

Asset light strategy

EmployeesFTE 1,586

Strong cash flow generation

Expanded international market leadership Global presencein 17 Countries

US20%

of Group revenue

Total Assets

CHF 477.8m

Improved core business profitability


EPSCHF 1.07

25

2014 CFO PRIORITIES

1 Enable growth initiatives

3 Active investor relations

2 Continue focus on financial and operational excellence

4 Provide transparency


[ ]


ASCOM WIRELESS SOLUTIONSCLAES ÖDMAN

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, Unite Software, Patient Systems, and Services

Acquired Integrated Wireless, Australia

> Increased footprint in Asia / Pacific

28

2013 – HIGHLIGHTS


Mirrors strategic focus, with 70% of revenue in healthcare and elderly care Enables direct access to Australian and New Zealand markets Creates product portfolio enhancement opportunities Aligned with strategic priority to further build the APAC market position Annual revenues of AUD 13-14 million in fiscal year 2012/13 with broad

customer base and good EBITDA margins

specialized provider of emergency wireless communicationsystems and workflow solutions in Australia.

2 January 2014 - Ascom Wireless Solutions closed the acquisition of Integrated Wireless, a

RECENT M&A

Ascom Annual Media Conference 2014 29

CUSTOMER RETURN ON INVESTMENT – AT THE CORE OF OUR BUSINESS

„Sampson Regional Medical Center (US):

Annual savings of USD 261,923 or 9,944 hours

across 12 hospital units –investment payback

period 351 days“

„Medstar Franklin Square Medical Center (US):

[Ascom lets] the human process drive the technology, not

technology revolution drive the human process“

„The ROI at Children‘s Hospital of Philadelphia:

reduced overhead paging, reduced message delivery time, fewer calls to department secretary, fewer handset repairs“

Strategic 2013 wins• King’s Health, London

• Klinikum Stuttgart, Germany

• Baptist Health South Florida, US

• Nytt Östfoldsykehus, Norway


31

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


Develop SW business


Service expansion

Growth market focus

OEM market share


Accelerate sales of software portfolio

• For example:

• Dedicated SW sales experts

• GE patient monitoring sales partnership

• Smartphone client



Develop SW business


Service expansion

Growth market focus

OEM market share


Introduce Ascom Nurse Call into new markets, and grow nurse call market share in existing Europe

• For example:

• Introduce European wireless nurse call system into US elderly care market

• Bring acquired GE portfolio into Asian and Middle East markets



Develop SW business


Service expansion

Growth market focus

OEM market share


Develop Services into a business in its own right

• For example:

• Increased professional services through larger and more complex deals

• Dedicated service sales experts



Develop SW business


Service expansion

Growth market focus

OEM market share


Continue building Ascom presence in growth markets – Middle East and Asia

• For example:

• Introduce full Ascom portfolio into Australian market – Integrated Wireless acquisition

• Build from Ascom regional hub in Singapore and Dubai respectively

• Execute smaller acquisitions for market presence



Develop SW business


Service expansion

Growth market focus

OEM market share


Increase market share with OEM partners

• For example:

• Projects to ramp up new OEM customers

• Jointly push large projects



Develop SW business


Service expansion

Growth market focus

OEM market share


Truly purpose-built device with workflow intelligent software

• For example:

• User experience specialists shadow nurses globally

• Interviews with stake holders and decision makers in the hospitals

• Unique understanding of how workflows can be optimized

• Unique healthcare and nurse specific features


38

WIRELESS SOLUTIONS – STRATEGIC TRANSITION


Global leader in healthcare workflow and communications

Global presence –solutions provider in healthcare

One portfolio

Process excellence

Thought leader

Yesterday Today Tomorrow

Product House for dedicated on site mobility.Europe presence.

System House for on site mobility and nurse call.Europe and US presence.

Solutions Provider for point of care workflow optimization in healthcare.Global presence.

Market positioning

Innovation

Operational efficiency

Mobility and alarmingfor segments with mission critical needs.

Supply chain excellenceOwn manufacturing - all disciplines in-house.Autonomous NSU.Functional organization.

Mobility, Software and Patient Systemsbusinesses in their own right. Regional gaps.

Products and professional services optimized for direct and indirect business globally

Supply chain excellenceAsset-light - outsourcingDiverse regions.Product lines introducedMatrix organization.

Process excellenceDivisional transparency through one ERP.Common divisionaloperating model.

[ ]


ASCOM NETWORK TESTINGRIKARD LUNDQVIST

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 over LTE (VoLTE)

Launched unique innovations – iPhone offering & Blixt™ testing methodology

Realized strong development in EMEA region

40

2013 - HIGHLIGHTS


41

CUSTOMER RETURN ON INVESTMENT – AT THE CORE OF OUR BUSINESS

Multi-year contract from one of Europe's largest operators

Multiple VoLTE-driven orders

Regulators in Latin America, Middle East & Africa

Tier-1 US operators benchmarking & service assurance


„During single site verification, US customer

saved 30-50% of time from data collection to

report generation“

„US customer reduced time spent on cluster optimization from 3-4

hours to 1-1.5 hours for an estimated 30-50%

time savings“

„European customer monitors quality of

experience 24x7 in live use to earn more revenue

and retain or win back customers lost to OTT application services“

Strategic 2013 wins

GROWTH INITIATIVES


Capacity Management

Blixt™Licensing

App & ServiceBenchmarking

ManagedServices

42

Radio Access Network makes up ~ 65% of a wireless operators total CAPEX

Just-in-time approach improves RAN CAPEX efficiency by ~ 35%

43

CAPACITY MANAGEMENT


43

Capacity limitsWhen to expand

What specific network elements have reached their limits

43

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

44

BLIXT™ - WHAT IS IT?


Device (UE)

iTunes or App Store

13

2

4

EPC

IP Network

Netflix

Battery saving

Data Tx/Rx saving Faster update

Optimize service delivery

Radio Network (RAN)

Facebook

Core Network

Benefits of Blixt™

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, MetroPCS, Rogers Communications, TeliaSonera International Carrier, Verizon

Evaluation based on:

technology innovation

financial impact

market validation

end-user customer experience

BLIXT™ - WINNER OF AN INNOVATION AWARD

“The Fierce Innovation

Awards celebrate the

companies who are on the

cutting edge of innovation

in the wireless, wireline and

advanced TV and network

sectors of our industry”


BLIXT™ - LICENSING OPPORTUNITY

• Visibility into customer experience• Customer engagement – customer care

Network Operators

• Improved battery life• Reduce app/service frustration – improve

customer experience

Smartphone OEMs

• Embed test functionality for greater network awareness

• Improve app & service performance

App & Service Providers


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.

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.

MANAGED SERVICES


48

MANAGED SERVICES – MULTINATIONAL DEPLOYMENT


APPLICATION & SERVICE BENCHMARKING


IMS

Data

Messaging

Voice

49

0

1

2

3

4

5

A‐LTE B‐LTE C‐WCDMA D‐EVDO E‐WCDMA F‐EVDO

Average MOS-V Score

Viewing Interruptions

Video Quality

Metrics:

Typical UsageMonitoringTrouble-shootingRegression testingBenchmarking

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 ManagementMore favorable product mix and improved operational efficiencies to grow

margins

50

2014 - FOCUS


Global leader in network performance assurance

Trusted brand with CxO visibility, thought leader and advisor

End-to-End solutions-provider

Stable recurring revenue streams and consistent growth

NETWORK TESTING - STRATEGIC TRANSITION

Yesterday Today Tomorrow

Technology leader in wireless network drive testing tools

Independent auditor of wireless network performance

Deep under-standing of network test metrics

Dependency on OEM & rollout

Strongest product portfolio across wireless testing

Global sales and service reach

Unique capabilities

Solution portfolio able to address CxO objectives

Trusted relationships

Trusted partner in wireless network investment and management


Market positioning

Associated core assets

FRITZ MUMENTHALER

52

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

53

OUTLOOK


Targets 2014*

• Target growth: 5-10% (organic and inorganic growth)

• Target EBITDA margin: 15-16%

54

OUTLOOK CORE BUSINESS


* Outlook assumes a steady economical environment and at least stable currency relations.

Targets 2015*

• Target growth: 5-10% (organic and inorganic growth)

• Target EBITDA margin: 16-17%

55

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

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%

56

SHAREHOLDERS – HIGHER DIVIDEND PAYMENT


Q&A


[ ]

Ascom Holding AG

Corp. Communications / IR Tel: + 41 41 544 78 00Zugerstrasse 32 Fax: + 41 41 761 97 256340 Baar [email protected]

58

GROUP CONTACT


[ ]

THANK YOU


welcome to the ascom media and analyst … · media and analyst conference 2013 annual results 1....

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