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WELCOME TO THE ASCOM
MEDIA AND ANALYST CONFERENCE
2014 HALF-YEAR RESULTS
1
ASCOM
MISSION-CRITICAL WIRELESS COMMUNICATION
TRUSTED PARTNER FOR WIRELESS NETWORK INVESTMENT AND
MANAGEMENT
WORK-FLOW OPTIMIZATION IN HEALTHCARE
2
3
AGENDA 20 AUGUST 2014
Ascom Half-Year Media Conference 2014
[ ]
§ Review H1/2014 § Financial Statements H1/2014 § Outlook
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STRONG H2 EXPECTED AFTER SLOW START IN H1/2014
Ascom Half-Year Media Conference 2014
Ascom Group
! Slow start mainly due to fewer large projects and delays of project decisions
! Positive book-to-bill ratio in both divisions resulting in build-up of order
backlog ! Based on backlog and healthy pipeline much stronger second half-year
expected
5
H2 WITH MUCH STRONGER EBITDA ANTICIPATED
Ascom Half-Year Media Conference 2014
Wireless Solutions Division ! Mixed business performance ! On-going investments in important growth initiatives such as Ascom Myco
and UNITE software suite ! WS anticipates stronger second half-year with a much stronger EBITDA
margin
Network Testing Division
! Large orders received in H1/2013 could only be partially compensated ! Asia Pacific: new organization / investments in market recovery ! NT targets to deliver profitability for the full year 2014 in line with the
previous year
6 Ascom Half-Year Media Conference 2014
RECOVERY EXPECTED AFTER WEAK H1/2014
H1 BELOW EXPECTATIONS BUT MARKET POTENTIAL INTACT
7 Ascom Half-Year Media Conference 2014
WEAK TOP LINE BUT GOOD ORDER BACKLOG
! Overall we see neither major fundamental changes nor structural issues in our markets. The good potential in our markets was confirmed. ! Weaknesses in certain regions have been addressed. ! Historically Ascom has stronger H2 and December is key month.
DOUBLE-DIGIT EBITDA MARGIN DESPITE LOWER REVENUES
! EBITDA margin: 10.5% (including non-core one-offs) ! Group profit: CHF 8.2 million
HEALTHY BALANCE SHEET
! Net cash position of CHF 2.3 million ! Equity ratio of 48.0%
1. Fewer projects over CHF 1 million, delay of some projects and performance below expectations mainly in the US lead to revenue decrease
2. EBITDA margin of 10.9%
3. Important strategic wins in Health Care in Norway, Netherlands and Sweden
4. High order backlog and good project pipeline
5. Much stronger EBITDA margin in H2 expected – following the seasonal pattern of previous years
ASCOM WIRELESS SOLUTIONS
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STRONG SECOND HALF-YEAR ANTICIPATED
Ascom Half-Year Media Conference 2014
! Dedicated focus on growth initiatives
§ Ascom Myco as unique purpose-built smart device for healthcare
§ Increased investments into UNITE software product line
! Bounce back in US § Thorough external assessment confirms
attractive market potential § New Managing Director appointed for US
! Small acquisitions in Australia and Malaysia as first steps in growth markets expansion
ASCOM WIRELESS SOLUTIONS
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FURTHER INVESTMENTS IN GROWTH INITIATIVES
Ascom Half-Year Media Conference 2014
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CHALLENGING FIRST HALF YEAR
1. Large orders received in H1/2013 could only partially be compensated
2. Large US operators returning to seasonal purchasing pattern
3. EMEA overall on track, but APAC and Latin America below expectations
4. Stable gross margin, but overall lower profitability due to revenue decrease
5. Buildup of order backlog during the first half and profitability for FY 2014 expected in line with the previous year
Ascom Half-Year Media Conference 2014
ASCOM NETWORK TESTING
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! Focus on recovery in APAC § Assessment confirms capability of Network
Testing to recover in APAC § Appointment of new Managing Director § Dedicated plan to recover implemented
! Investments in growth initiatives: § Development of Capacity Management § Integrated solutions capabilities § eContract Exchange B2B Simplex
Ascom Half-Year Media Conference 2014
WELL POSITIONED TO BOUNCE BACK IN H2/2014
ASCOM NETWORK TESTING
BIANKA WILSON
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FINANCIAL STATEMENTS H1/2014
Ascom Half-Year Media Conference 2014
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ASCOM GROUP H1/2014 IN SUMMARY
Revenue CHF 202.7m
Gross margin 48.1%
Ascom Half-Year Media Conference 2014 13
EBITDA CHF 21.3m
10.5%
Group profit
CHF 8.2m
Total assets CHF 453.8m
Backlog
CHF 165.0m
NWC CHF
65.3m
Net cash
CHF 2.3m
Equity ratio 48.0%
Free CF (incl. M&A)
CHF 16.8m
Core business1) Other2)
H1/2013 H1/2014 H1/2013 H1/2014 Incoming orders 248.9 219.7 10.8 9.3 Revenue 214.8 193.4 10.3 9.3 Gross profit 111.5 97.6 0.6 - Gross margin 51.9% 50.5% 5.8% n/a EBIT 17.4 7.8 0.4 4.4 EBIT margin 8.1% 4.0% 3.9% 47.3% EBITDA 27.3 16.7 0.6 4.6 EBITDA margin 12.7% 8.6% 5.8% 49.5%
CORE BUSINESS FOCUS
Ascom Half-Year Media Conference 2014 14
1) Core business = Total Group minus non-core activities (segment “Other”) comprising real estate activities related to businesses disposed of in prior years 2) Other includes “Other income” of total CHF 4.6 million related to the divestment of real estate in Switzerland
(CHFm)
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WIRELESS SOLUTIONS H1/2014 PERFORMANCE OVERVIEW
Ascom Half-Year Media Conference 2014
§ Incoming orders CHF 161.9 million (H1/2013: CHF 171.9 million) § Revenue of CHF 140.8 million (H1/2013: CHF 149.7 million) § Inorganic contribution from the Integrated Wireless (AU) acquisition of 2.9% on
incoming orders and 2.3% on revenue § Unfavorable FX translational impact of 1.9% on incoming orders and 2.2% on
revenue § Backlog increase of CHF 22.9 million compared to year-end 2013 § EBITDA margin of 10.9% (H1/2013: 14.0%)
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NETWORK TESTING H1/2014 PERFORMANCE OVERVIEW
Ascom Half-Year Media Conference 2014
§ Incoming orders CHF 57.9 million (H1/2013: CHF 77.1 million) § Revenue of CHF 52.7 million (H1/2013: CHF 65.2 million) § Unfavorable FX translational impact of 2.6% on incoming orders and 2.9% on
revenue § Backlog increase of CHF 4.9 million compared to year-end 2013 § EBITDA margin of 4.4% (H1/2013: 11.8%)
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CONTINUED BACKLOG BUILD
Ascom Half-Year Media Conference 2014
(CHFm)
30.6.2013 31.12.2013 30.6.2014
Wireless Solutions 113.5 102.6 125.5
Network Testing 44.9 34.5 39.4
Core business1) 158.4 137.1 164.9
Other 1.1 0.2 0.1
Ascom Group 159.5 137.3 165.0 1) Core business = Total Group minus non-core activities (segment “Other”) comprising real estate activities related to businesses disposed of in prior years
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EBITDA REFLECTS VOLUME DECREASE AND COST SAVINGS
Ascom Half-Year Media Conference 2014
[VALUE].0
15.4
-4.5 [VALUE] -[VALUE]
-[VALUE]
EBITDA H1/2013
Volume impact
Func. costs
M&A related
Others EBITDA H1/2014
Wireless Solutions
7.7
2.3
-7.0
2.2 -0.6
EBITDA H1/2013
Volume impact
Func. costs Other EBITDA H1/2014
Network Testing
(CHFm)
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EBITDA TO GROUP PROFIT RECONCILIATION
Ascom Half-Year Media Conference 2014
21.3
8.2
-[VALUE]
-[VALUE]
-[VALUE]
EBITDA H1/2014 Depreciation / amortization
Net financial expenses Income tax Group profit H1/2014
(CHFm)
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CASH DEVELOPMENT REMAINS STRONG
Ascom Half-Year Media Conference 2014
58.2 49.8
21.3
[VALUE] -[VALUE]
-[VALUE] 0.8 -[VALUE]
-13.7
-[VALUE] -2.7
Cash at 1.1.2014
EBITDA NWC Provision related effects
CapEx Acquisitions Interest and tax payments
Debt related cash flows
Dividend Other cash flows
Cash at 30.6.2014
(CHFm)
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NET CASH POSITION
Ascom Half-Year Media Conference 2014
(CHFm)
80.3 65.3
-40
0
40
80
120
31.12.2013 30.6.2014
Net working capital (NWC)
Trade receivables Inventories
Trade payables Customer prepayments
Total NWC
52% 48%
-80.0
-40.0
-
40.0
80.0
31.12.2013 30.6.2014
Net cash/debt and Equity ratio
Cash and equivalents Borrowings
Net cash/debt Equity ratio (in %)
SHAREHOLDERS’ EQUITY
Ascom Half-Year Media Conference 2014 22
246.4 234.6
217.8
8.2 -[VALUE]
-[VALUE] -[VALUE]
Balance at 31.12.2013
Group profit IAS 19, net of income tax
Dividend (share premium)
Other Balance at 30.6.2014
(CHFm)
FRITZ MUMENTHALER
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OUTLOOK
Ascom Half-Year Media Conference 2014
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24 Ascom Half-Year Media Conference 2014
ASCOM WIRELESS SOLUTIONS
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THE POWER OF ONE –IMPROVING WORKFLOW MANAGEMENT
Ascom Half-Year Media Conference 2014
CUSTOMER
Pa#entSystems
CUSTOMER
UniteSo/ware
CUSTOMER
Mobility
CUSTOMER
Services
Systemintegrator
Reseller
CUSTOMER
Pa#entSystems UNITESo/ware Mobility
Services
§ Clinical Alarms – increased patient safety and efficiency
The right alarm goes to the right nurse with the right information
§ Clinical Information – better informed decisions EHR integration provides access to patient information and clinical data § Workforce Management – optimized use of available resources Workforce overview makes it easier to put the right person on the right job and follow-up on efficiency and performance
ASCOM UNITE – THE CORE OF INTEGRATED WORKFLOW INTELLIGENCE
UniteToday CurrentRoadmap Mid-termPlan Long-termPlan
ASCOM UNITE
Mobility
Patient Monitor
Nurse Call
System Census Trends
Order Entry
System
Scheduling, Time
And Attendanc
e Bed
Placement (ADT)
Electronic Health
Records
Test Results
Pharmacy
Ventilator
IV Pump
Bed Alarm
ASCOM UNITE focus areas
Ascom Half-Year Media Conference 2014 26
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ASCOM MYCO – INTEGRATED WORKFLOW INTELLIGENCE IN THE PALM OF YOUR HAND
Ascom Half-Year Media Conference 2014
The combination of UNITE, Patient Systems and our new purpose-built smartphone Ascom Myco helps the caregiver to:
§ Respond faster at the point of care
§ Be more efficient in decision making
§ Spend more time bedside with patients
§ Be less exposed to alarm fatigue
§ Reduce operational cost
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ASCOM PATIENT SYSTEMS – DRIVING LEADERSHIP POSITION IN ELDERLY CARE
Ascom Half-Year Media Conference 2014
ASCOM teleCARE IP Always present. Always on. Always safe.
§ Ascom developed, bidirectional wireless technology § Comprehensive set of hardwire & wireless devices § Scalable from basic to high-end § Embedded mobility interface for distributed alerts § Released Q4/2013 to CE countries – expanding to US market 2014 addressing non-acute care segment
reddotdesignawardwinner2014
Customizable
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ASCOM NETWORK TESTING
Ascom Half-Year Media Conference 2014
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Trial Roll-out Optimization Operation
Test & Measurements TEMS Investigation, TEMS Pocket
Reporting & Analysis TEMS Discovery, TEMS Visualization
Benchmarking & Monitoring TEMS Automatic, TEMS Symphony TEMS Monitor Master
LEVERAGING VOLTE LEADERSHIP
30 Ascom Half-Year Media Conference 2014
VoLTE
TEMS™ Capacity Manager
! Understand IF, WHEN and WHERE networks will be congested ! Make intelligent investment decisions that reduce capital need
INNOVATIVE TECHNOLOGY MAKING A DIFFERENCE
31 Ascom Half-Year Media Conference 2014
Capacity limits When to expand
What specific network elements have reached their limits
TEMS CAPACITY MANAGER
Ascom Half-Year Media Conference 2014
Providing a single, easy to use web portal for storing, reporting and visualizing all the RAN’s service capacity information.
Enabling consistent optimization of soft capacity for WCDMA and LTE networks. Operators can use their current capacity resources up to their optimized limits before investing in CAPEX on new resources.
Delivering just-in-time capacity expansion capability because of its comprehensive approach to forecasting
CAPEX savings of up to 40%
Extremely short payback
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COMPLEX BILATERAL CONTRACTS MADE SIMPLE
Ascom Half-Year Media Conference 2014
New solution automates eContract Exchange between carriers § Replaces expensive, time-consuming manual processes § Provides user tools to monitor & measure contract performance Provides carriers cost savings & interconnect efficiencies: § Reduces risk, legal issues due to data errors & ambiguities § Enables stakeholders to collaborate on contracts (on both sides) § Validates data, e.g. dial codes, pricing, charges, volumes in real time § Helps carriers reduce resources allocated to contract management by 50% B2BSimpleX: a significant market opportunity § First to market with complete ‘all-in-one’ solution § Carrier partners, e.g. Deutsche Telekom, TeliaSonera § Multiple pricing & service levels for entire carrier market § Very promising growth rate and ROI
STARTING POINT !Ascom historically has a stronger second half-year !High order backlog and strong project pipeline in both divisions !Tight cost management in place !Strengthened management team with appointment of new key people
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OUTLOOK FY 2014
Ascom Half-Year Media Conference 2014
TWO IMPORTANT ORDERS ALREADY RECEIVED IN H2/2014 § Wireless Solutions wins CHF 4.7 million order from OEM customer for
DECT wireless network solution and handsets.
§ Network Testing receives a lower single digit CHF million order from Swisscom for products and solutions to expand, improve, and continously monitor the performance of its mobile network.
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OUTLOOK
Ascom Half-Year Media Conference 2014
Targets 2014* for the Core Business
§ Revenue at previous year’s level
§ EBITDA margin in the range of 14–16%
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OUTLOOK
Ascom Half-Year Media Conference 2014
* Outlook assumes a steady economical environment and at least stable currency relations.
Net Profit 2014*
§ Ascom anticipates net profit to be at around the previous year’s level
(2013: CHF 36.9 million)
Ascom Holding AG
Corp. Communications / IR Tel: + 41 41 544 78 00 Zugerstrasse 32 Fax: + 41 41 761 97 25 6340 Baar [email protected]
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GROUP CONTACT
Ascom Half-Year Media Conference 2014
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LEGAL DISCLAIMER
Ascom Half-Year 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 and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, financial situation, development or performance of Ascom and those explicitly presumed in these statements.
Against the background of these uncertainties readers should not rely on forward-looking statements. Ascom assumes no responsibility to update forward-looking statements or adapt them to future events or developments.
THANK YOU
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