WELCOME TO THE ASCOM MEDIA AND ANALYST CONFERENCE 2013 ANNUAL - - PowerPoint PPT Presentation

WELCOME TO THE ASCOM MEDIA AND ANALYST CONFERENCE 2013 ANNUAL RESULTS

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ASCOM MISSION-CRITICAL WIRELESS COMMUNICATION TRUSTED PARTNER FOR WIRELESS NETWORK INVESTMENT AND MANAGEMENT WORK-FLOW OPTIMIZATION IN HEALTHCARE

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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 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.

THE EXECUTIVE BOARD

Ascom Annual Media Conference 2014

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

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AGENDA 5 MARCH 2014

Ascom Annual Media Conference 2014

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FRITZ MUMENTHALER

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REVIEW 2013

Ascom Annual Media Conference 2014

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ASCOM ACHIEVEMENTS 2013

1 DELIVERED ON STRATEGY – BUILT THE BASE FOR FUTURE GROWTH 3 FINANCIAL KPI’S SUBSTANTIALLY IMPROVED 2 DELIVERED ON OPERATIONAL EXCELLENCE

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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

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ASCOM ACHIEVEMENTS 2013

Ascom Annual Media Conference 2014

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

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ASCOM ACHIEVEMENTS 2013

Ascom Annual Media Conference 2014

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%

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ASCOM ACHIEVEMENTS 2013

Ascom Annual Media Conference 2014

• 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 and

in 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

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Solution provider for work-flow optimization in healthcare

Ascom Annual Media Conference 2014

• 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 and Blixt) and a promising eContracts platform for operators (Systems & Solutions)

• Order backlog, initiated growth initiatives

and favorable market dynamics will bolster profitable growth ASCOM NETWORK TESTING

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Trusted partner in wireless network investment and management

Ascom Annual Media Conference 2014

BIANKA WILSON

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2013 FINANCIAL RESULTS

Ascom Annual Media Conference 2014

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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

Ascom Annual Media Conference 2014

Ascom Group

• 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)

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GROWTH ANALYSIS

Ascom Annual Media Conference 2014

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

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 business

1)

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% Revenue Wireless 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 business

1)

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%

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REVENUE BY REGION / KEY COUNTRY

US US EMEA EMEA Americas Americas CH CH APAC APAC

83 336 47 95 19 91 101 345 44 14

Ascom Annual Media Conference 2014

NL NL

69 69

DE DE

54 58 (Based on location of customer)

Corporate / division headquarter Subsidiary or branch Acquired 2 January 2014 Key country = > 10% of Group revenue 2013 2012

CHFm Core business1) Other 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 (1.8) EBIT (%) 6.1% 11.2% 1.4% n/a EBITDA 48.3 68.9 0.7 (1.3) EBITDA (%) 11.3% 15.7% 3.2% n/a

CORE BUSINESS IN FOCUS

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Most dilutive non-core activities will discontinue end 2015

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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CONTINUED EBITDA IMPROVEMENT IN CORE BUSINESS

Ascom Annual Media Conference 2014

48.2 53.1 4.3

• 2.0
• 0.5

2.7 0.4 EBITDA 2012 Volume impact Margin impact Func. costs One-offs Others EBITDA 2013

Wireless Solutions

• 4.6

17.9 11.6 11.8 1.4

• 1.1
• 1.2

EBITDA 2012 Restruct. expense Savings Volume impact Margin impact Others EBITDA 2013

Network Testing

Driven by volume increase and savings

(CHFm)

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SIGNIFICANT IMPACT OF H1/H2 SEASONALITY

Ascom Annual Media Conference 2014

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

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EBITDA TO GROUP PROFIT RECONCILIATION

Ascom Annual Media Conference 2014

67.6 36.9

• 20.0
• 1.9
• 3.1
• 1.0
• 4.7

EBITDA 2013 Depreciation / amortization Net FX losses Net interest expenses Other financial expenses 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

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TAX BRIDGE Significant tax reduction due to tax loss carry-forwards

(CHFm)

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EXCELLENT CASH GENERATION

Ascom Annual Media Conference 2014

63.1 58.2 67.6 20.9

• 11.3
• 8.6
• 12.2
• 9.0
• 42.9
• 12.2

2.8

Cash at 1.1.2013 EBITDA NWC improvement Provision related cash flows CapEx Acquisition Interest and tax payments Debt related cash flows Dividend / capital distribution Other cash flows Cash at 31.12.2013

Strong cash generation enables balance sheet efficiency

(CHFm)

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IMPROVED BALANCE SHEET EFFICIENCY

Ascom Annual Media Conference 2014

Enables future priorities for capital allocation

(CHFm)

101.2 80.3

• 40

40 80 120 2012 2013

Net working capital (NWC)

Trade receivables Inventories Trade payables Customer prepayments Total NWC 32% 52%

• 130
• 80
• 30

20 70 120 2012 2013

Net debt and Equity ratio

Cash and equivalents Borrowings Net debt Equity ratio (in %)

8.6 12.2 14.4

2011 2012 2013

Dividends

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RETURN TO SHAREHOLDERS

Ascom Annual Media Conference 2014

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

Revenue

CHF 459.7m

Gross margin 49.4% EBITDA

CHF 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

Employees

FTE 1,586

Strong cash flow generation Expanded international market leadership

Global presence in 17 Countries

US 20%

• f Group

revenue

Total Assets

CHF 477.8m

Improved core business profitability

Ascom Annual Media Conference 2014

EPS

CHF 1.07

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2014 CFO PRIORITIES

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Enable growth initiatives

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Active investor relations

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Continue focus on financial and operational excellence

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Provide transparency

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ASCOM WIRELESS SOLUTIONS CLAES 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

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2013 – HIGHLIGHTS

Ascom Annual Media Conference 2014

• 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 communication systems and workflow solutions in Australia. 2 January 2014 - Ascom Wireless Solutions closed the acquisition

• f 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

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GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND

Ascom Annual Media Conference 2014

Develop SW business Nurse call globalization Service expansion Growth market focus OEM market share Next generation smart device

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Develop SW business Nurse call globalization Service expansion Growth market focus OEM market share Next generation smart device Accelerate sales of software portfolio

• For example:
• Dedicated SW sales experts
• GE patient monitoring sales

partnership

• Smartphone client

GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND

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Develop SW business Nurse call globalization Service expansion Growth market focus OEM market share Next generation smart device 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

GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND

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Develop SW business Nurse call globalization Service expansion Growth market focus OEM market share Next generation smart device Develop Services into a business in its

• wn right
• For example:
• Increased professional services

through larger and more complex deals

• Dedicated service sales experts

GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND

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Develop SW business Nurse call globalization Service expansion Growth market focus OEM market share Next generation smart device 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

GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND

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Develop SW business Nurse call globalization Service expansion Growth market focus OEM market share Next generation smart device Increase market share with OEM partners

• For example:
• Projects to ramp up new OEM

customers

• Jointly push large projects

GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND

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Develop SW business Nurse call globalization Service expansion Growth market focus OEM market share Next generation smart device 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

GROWTH INITIATIVES – OUR FOCUS 2014 AND BEYOND

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WIRELESS SOLUTIONS – STRATEGIC TRANSITION

Ascom Annual Media Conference 2014

• 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

• ptimization in

healthcare. Global presence.

Market positioning Innovation Operational efficiency

Mobility and alarming for segments with mission critical needs. Supply chain excellence Own manufacturing - all disciplines in-house. Autonomous NSU. Functional organization. Mobility, Software and Patient Systems businesses in their own

• right. Regional gaps.

Products and professional services

• ptimized for direct and

indirect business globally Supply chain excellence Asset-light - outsourcing Diverse regions. Product lines introduced Matrix organization. Process excellence Divisional transparency through one ERP. Common divisional

• perating model.

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ASCOM NETWORK TESTING RIKARD 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

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2013 - HIGHLIGHTS

Ascom Annual Media Conference 2014

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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

Ascom Annual Media Conference 2014

„During single site verification, US customer saved 30-50% of time from data collection to report generation“ „US customer reduced time spent on cluster

• ptimization 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

Ascom Annual Media Conference 2014

Capacity Management Blixt™ Licensing App & Service Benchmarking Managed Services

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• Radio Access Network makes up ~ 65% of a wireless operators total CAPEX
• Just-in-time approach improves RAN CAPEX efficiency by ~ 35%

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CAPACITY MANAGEMENT

Ascom Annual Media Conference 2014 43

Capacity limits When to expand What specific network elements have reached their limits

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• 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

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BLIXT™ - WHAT IS IT?

Ascom Annual Media Conference 2014

Device (UE) iTunes or App Store

1 3 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
• f 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”

Ascom Annual Media Conference 2014 45

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

Ascom Annual Media Conference 2014 46

Wireless performance data:

• Collected by smartphones
• Transmitted to server
• Automatically processed
• Presented on dashboard & map

On a site hosted and managed On a site hosted and managed by Ascom by Ascom in the cloud. in the cloud. Wireless performance data:

• Collected by smartphones
• Transmitted to server
• Automatically processed
• Presented on dashboard & map

On a site hosted and managed On a site hosted and managed by Ascom by Ascom in the cloud. in the cloud.

MANAGED SERVICES

Ascom Annual Media Conference 2014 47

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MANAGED SERVICES – MULTINATIONAL DEPLOYMENT

Ascom Annual Media Conference 2014

APPLICATION & SERVICE BENCHMARKING

Ascom Annual Media Conference 2014

IMS Data Messaging Voice

49 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 Usage Monitoring Trouble-shooting Regression testing Benchmarking

• 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 operational efficiencies to grow

margins

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2014 - FOCUS

Ascom Annual Media Conference 2014

• 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

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Market positioning Associated core assets

FRITZ MUMENTHALER

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OUTLOOK

Ascom Annual Media Conference 2014

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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

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OUTLOOK

Ascom Annual Media Conference 2014

Targets 2014*

• Target growth: 5-10% (organic and inorganic growth)
• Target EBITDA margin: 15-16%

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OUTLOOK CORE BUSINESS

Ascom Annual Media Conference 2014

* 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%

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2014 PRIORITIES FOR CAPITAL ALLOCATION

Ascom Annual Media Conference 2014

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%

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SHAREHOLDERS – HIGHER DIVIDEND PAYMENT

Ascom Annual Media Conference 2014

Q&A

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Ascom Holding AG

• Corp. Communications / IR

Tel: + 41 41 544 78 00 Zugerstrasse 32 Fax: + 41 41 761 97 25 6340 Baar investor@ascom.com

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GROUP CONTACT

Ascom Annual Media Conference 2014

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THANK YOU

Ascom Annual Media Conference 2014 59