Half-Year Results Presentation 2012 - Ascom€¦ · TEMS Investigation . TEMS Pocket . 29 . With...

WELCOME TO THE ASCOM

MEDIA & ANALYST CONFERENCE

2012 HALF-YEAR RESULTS

[ ]

FRITZ MUMENTHALER, CEO

MARTIN ZWYSSIG, CFO

2012 HALF-YEAR RESULTS

2012 Half-Year Results Conference, 22/08/2012 © Ascom Group 2

H1/2012 Ascom Group: Stable revenue Profit of CHF 2.6m (in line with communication in June)

Wireless Solutions (about 70% of Ascom’s Business): Outstanding first two quarters

Network Testing (about 30% of Ascom’s Business): On-going slow market demand reflected in the numbers Turn-around well under way, measures to reduce cost base by CHF 15m taken Moderate market recovery expected for second half-year 2012

Divestment of Security Communication Division completed

EBITDA-margin of 14-15% for 2013 confirmed

CORNERSTONES 1ST HALF-YEAR 2012


[ ]

2012 HALF-YEAR RESULTS AT A GLANCE BUSINESS DEVELOPMENT 2012 HALF-YEAR FINANCIAL RESULTS SUMMARY AND OUTLOOK

AGENDA


[ ]

2012 HALF-YEAR RESULTS AT A GLANCE


Stable revenue development for continuing operations

Wireless Solutions: Revenue growth in local currencies 9.7%. Market position in Health Care further improved.

Network Testing: Decrease of revenue by 12.7% in local currencies reflects continuing slow market demand. Market share in most important business unit “Test & Measurement” defended.

Ascom Group: Revenue at CHF 213.4m; stable compared to H1/2011

STABLE REVENUES


Group profit impacted by restructuring charges and NT performance

Net profit: CHF 2.6m (H1/2011: CHF 9.0m) includes restructuring expenses of CHF 8.8m

EBITDA for continuing operations CHF 10.7m (H1/2011: CHF 27.8m)

Wireless Solutions Gross margin improved by another 2.1 percentage points to 53.0% EBITDA increased by 18.5% to CHF 21.1m EBITDA margin improved to 14.9% (H1/2011: 13.4%)

Network Testing EBITDA negative at CHF -11.8m EBITDA excl. restructuring expenses at CHF -3.0m (H1/2011: CHF 5.4m)

PROFIT AS COMMUNICATED IN JUNE


Ascom Czech Republic MBO (closed on 10 October 2011)

Defense Ruag (closed on 1 March 2012)

Ascom Austria MBO (closed on 1 April 2012)

Infrastructure Operators Trans Data Management (closed on 1 April 2012)

Civil Security Sitasys (closed on 31 July 2012)

Divestments completed on 31 July 2012 within less than one year Interests of customers and employees served preferentially

DIVESTMENT SECURITY COMMUNICATION COMPLETED


[ ]

BUSINESS DEVELOPMENT

2012 Half-Year Results Conference, 22/08/2012 © Ascom Group

WIRELESS SOLUTIONS NETWORK TESTING

9

[ ]

www.ascom.com/ws


WIRELESS SOLUTIONS

10

Wireless Solutions grows its business

Revenue growth of 9.7% in local currencies Strong performance in the US – Ascom gaining market share in Health Care Very good development in the UK – substantial progress in Retail Strong performance in DACH region (DE, AT and CH) Book-to-bill ratio > 1

WIRELESS SOLUTIONS – EXCELLENT RESULTS IN H1/12


Wireless Solutions improves its operational efficiency

Gross margin increased by 2.1 percentage points to 53.0% EBITDA margin up by 1.5 percentage points to 14.9% (H1/2011: 13.4%)

11

Continued investments in innovation and in the sales organization

Launch of Multi Medical Alarm module (MMA), next generation of medical alarms for efficient management of medical devices

R&D investments of CHF 11.5 million; focus on the next generation handsets Build-up of sales force in the US

WIRELESS SOLUTIONS – ACHIEVEMENTS


Acquisition of GE Healthcare Nurse Call business

GE Healthcare is one of the three leading vendors of nurse call solutions used throughout North America

GE Healthcare Nurse Call business with a large installed base and overall presence in North America will enhance Ascom’s existing nurse call business

Acquisition will reinforce existing partnership between GE Healthcare and Ascom Acquisition of GE Healthcare Nurse Call business is another step towards global

market leadership in healthcare communication

12

Integrations Unite Device interfaces

Patient monitoring Nurse call Laboratory Radiology Building management

Integration middleware System management Device licensing Duty assignment Event handling Escalation Reporting

Wireless phones Smartphones LED boards Pagers Tablets

2-way interactive messaging/alerts

ASCOM‘S USP


Inputs Outputs

13

A UNIQUE SOLUTION


COMPLETE SYSTEM

OUT OF ONE HAND

14

SMART DEVICES IN OUR PLAYING FIELD

WE BUILD THE BEST HANDSETS IN THE WORLD


NEXT GENERATION HANDSETS

NEED FOR MORE INTEGRATION

15

CLOSELY INTEGRATED WITH UNITE

AN INTERNATIONAL NURSE CALL PROVIDER


COMPLETE SYSTEM

TRULY GLOBAL

USE THE MOMENTUM OF IP

16

[ ]


NETWORK TESTING

www.ascom.com/nt

17

Network Testing consolidated its market leadership

Market leader with global sales presence and an innovative, integrated product portfolio ready to capitalize from coming up-turn

Market leadership in the most important Test & Measurement market was maintained Reporting & Analysis with strong growth in H1/2012 R&D spending of CHF 13.5m (22.2% of revenue excl. restructuring expenses)

NETWORK TESTING – ADAPTED TO MARKET REALITIES


Network Testing will reduce its cost base by CHF 20m

Implementation of cost reduction program All measures towards CHF 15m cost reduction completed by June 2012. First cost

benefits in H2/2012, full run-rate savings as of 2013 Management is committed to start 2013 with a substantially reduced overall cost

base by CHF 20m

18

Achievements in H1/2012

New product releases Reporting & Analysis: TEMS Discovery Enterprise introduced to the market Benchmarking & Monitoring:

Support for LTE extended to TEMS Automatic product line Test & Measurement: Several new TEMS Pocket models were introduced

NETWORK TESTING – ACHIEVEMENTS AND TRENDS


Market trends in H2/2012

Second half of 2012 is expected to improve Americas:

First signs of market stabilization, growth is expected from service providers EMEA: Middle East & Africa show growing market trend APAC: Moderate market recovery is expected due to first LTE roll-outs

19

[ ]


NETWORK TESTING: THE MARKET

www.ascom.com/nt

20

Harsh market environment Mobile network operators continued to focus on cost-saving programs for

investments and operational expenses Investment in LTE networks continues being pushed out Further decline in the demand for mobile network infrastructure in North

America > failed merger of AT&T/T-Mobile brought infrastructure purchase to a standstill

Customer demand in Europe softened Markets in Middle East & Africa showed a growing trend Asia Pacific: Increasing competition and weaker than expected demand

Overall mobile network operators CapEx and OpEx reluctant

NETWORK TESTING – DEMANDING ENVIRONMENT IN H1/2012


Decline in wireless infrastructure with network equipment manufacturers

Revenue Networks Division -17%.

Overall revenue -8%. Growth in services offset by decline in equipment.

Revenue Wireless

Networks Division -24%.

All numbers represent year-over-year comparisons H1/12 vs. H1/11. Source: Company reporting and press statements.

Weak demand confirmed by network equipment manufacturers

MARKET – NETWORK EQUIPMENT MANUFACTURERS


Operator challenges Operator needs – Market drivers Increasing: Capacity demand Build capacity

Exponential mobile data growth LTE has superior spectrum efficiency and operator ROI and will be rolled out

Spectrum scarcity Capacity augmented with Wifi, HSDPA+, Hetnets and small cell technologies

Increasing: Complexity Increase efficiency

Multi technology and multi vendor networks Roll-out and operation of complex networks, services and applications require cost effective automated solutions that work across vendors and technologies. Services, apps and devices

Not increasing: ARPU Manage quality of experience

Average revenue per user (ARPU) is trending down Cut through complexity, focus on the actual experience of the consumer.

“Over the top” (OTT) players and device manufacturers encroach on operators

Solutions need to consider the network, the service, the application and the device and requires expertise in all these dimensions.

Network Testing is the industry leader with the largest installed base and has positioned to meet the new demand with the industry’s most integrated, broad portfolio targeting the network,

service, application and device dimension of the wireless industry

THE ASCOM ADVANTAGE


Expected mobile broadband traffic load Revenue trends do not correspond with traffic growth

Operator’s revenue/MB going down by 50% p.a. Operator’s cost/MB going down by 32% p.a.

With margins in decline, operators struggle to meet increasing capacity demand

EXPONENTIAL DATA GROWTH LEADING TO PRESSURE ON CAPACITY


Source: Nokia Siemens Networks whitepaper

24

LTE POPULATION COVERAGE STILL INSIGNIFICANT


Percentages represent portion of population that are within the deployed coverage area, not actual subscriber penetration.

25

LTE PENETRATION OFFERS ATTRACTIVE POTENTIAL


Asia Pacific

Europe Middle East

Americas

PLANNED LTE NETWORK LAUNCHES


Q3/12 Q4/12 Q1/13 Q2/13 Q3/13

Oman

Mexico

Italy Russia Switzerland

USA

Australia Malaysia China

Switzerland

27

Opp

ortu

nity

for

Net

wor

k Te

stin

g

Network roll-out

WHEN DOES LTE BUSINESS KICK IN?


Need for NT fully materializes once a network gained critical mass in its subscriber base and the network is considered to be at a maintenance stage

When it comes to new standards such as LTE, there is volume lag until those networks are rolled out across the world

Source: Jefferies, 2012

Trials Roll-out Maintenance

28

TRIAL ROLL-OUT OPTIMIZATION OPERATION

Network Testing supports all phases of the network life cycle

OPPORTUNITY CYCLE NETWORK TESTING


Benchmarking & Monitoring

TEMS Automatic TEMS Symphony TEMS Monitor Master

Reporting & Analysis TEMS Visualization

TEMS Discovery

Test & Measurement

TEMS Investigation TEMS Pocket

29

With LTE starting to be rolled out: focus of testing is shifting from voice quality to data and application performance (Yesterday: “Did my call get through?” Today: “Can I access my Facebook account? Does Skype work?”)

Traditional outdoor drive testing will become relatively less important, as large-scale geographic network roll-outs will be increasingly replaced by capacity upgrades in typically more challenging environments (e.g., indoors). Indoor deployments are expected to grow at a 15% CAGR rate over the next 5 years (ABI Research).

Labor intensive activities will be increasingly outsourced to engineering service providers, or preferably eliminated through use of smarter technology for reporting and analysis

Demand continues to grow for competitive benchmarking and to monitor and understand the end-customer experience

THE MARKET SPACE OF NETWORK TESTING IS EVOLVING


[ ]


NETWORK TESTING COST REDUCTION PROGRAM AND RE-ORGANIZATION

www.ascom.com/nt

31

A substantial restructuring and reorganization program was initiated in April

with a CHF 15m target run-rate cost reduction – this target has been achieved

Sites in Kista, Sweden and in Eningen, Germany have been closed

The vast majority of affected employees left the company during May and June

First positive impact of these changes are seen in the first half of 2012

Commitment to customers and to technology leadership has not changed

Customer support levels have been maintained

Reductions in R&D have been achieved primarily through portfolio streamlining

and increases in productivity, driven by ongoing platform synergy program

SUBSTANTIAL COST SAVINGS ACHIEVED IN Q2


ENHANCED CUSTOMER FOCUS


Asia & Pacific Europe, Middle East & Africa Americas

Test & Measurement

Benchmarking & Monitoring

Director Finance & Controlling

Strategic Functional Leaders

GENERAL MANAGER

PRODUCT UNITS Product Management Product Development

Product Support Product Partnering

Regional Sales Regional Finance

Regional Service Delivery Regional HR

Order Desk

Reporting & Analysis

REGIONAL UNITS

33

The new structure has created immediate tangible benefits:

Reductions in backlog as regional sales, finance and supply chain now formally own both expenses and revenue recognition

Faster resolution of customer issues and increased visibility of opportunities for tactical marketing campaigns have resulted from improved interaction between product units and regions, as well as better communication of longer-term product issues that have driven high customer support costs in the past

Substantial further R&D productivity improvements are expected from the sharpened focus within the product units in 2013 and beyond

REORGANIZATION HAS RESULTED IN IMMEDIATE BENEFITS


[ ]


NETWORK TESTING: OUTLOOK

www.ascom.com/nt

35

Americas

Large U.S. operators AT&T, T-mobile and Verizon are expected to resume spending

Opportunities in Central and South America driven by LTE Sales to 3rd party service providers are expected to further

increase

Europe, Middle East

& Africa

Continued growth trends in the Middle East and Africa Strong pipeline with limited reliance on large deals for success New hires and targeted products in place to support market

share growth

Asia Pacific

Strong sales outlook in select markets including China

New Reporting & Analysis customized offering launched for Asia Pacific customers

Continued progress in anti-piracy campaign

WE EXPECT A STRONGER TOP LINE IN THE SECOND HALF


In the course of implementing the cost reduction and restructuring program in Network Testing in the second quarter, additional selective cost reduction measures have been identified and are being implemented in the second half to further drive profitability and capitalize on operational improvements.

Ascom Management is committed to start 2013 with a – by CHF 20m – substantially reduced cost base.

ADDITIONAL PROFITABILITY MEASURES WILL CAPITALIZE ON PRODUCTIVITY IMPROVEMENTS ACHIEVED


[ ]

2012 HALF-YEAR FINANCIAL RESULTS


CHFm 1st half 2011 1st half 2012 Revenue 213.4 213.4 Gross profit 110.3 101.2 Gross margin (%) 51.7% 47.4%

Total functional costs (89.3) (95.9) Amortization of intangible assets from acquisition (5.0) (5.3)

Other income/(expenses), net 2.0 0.4

EBIT 18.0 0.4 Net financial result (8.3) (1.3)

Income tax (1.7) (2.6)

Profit/(loss) from continuing operations 8.0 (3.5) Profit/(loss) from discontinued operations 1.0 6.1

Group profit for the period 9.0 2.6 EBITDA 27.8 10.7 EBITDA margin (%) 13.0% 5.0%

CONSOLIDATED INCOME STATEMENT


GROWTH ANALYSIS


Actual 2011.06 (in CHFm)

Organic growth (in %)

FOREX translation (in %)

Acquisition (in CHFm)

Actual 2012.06 (in CHFm)

Δ 2012/2011 (in %)

Wireless Solutions 132.4 6.2% -2.8% 4.7 141.5 6.9%

Network Testing 70.3 -12.7% -0.8% n/a 60.8 -13.5%

Real Estate 10.9 2.1% -0.2% n/a 11.1 1.9%

Total Ascom 213.4 -0.2% -2.0% 4.7 213.4 0.0%

40

NETWORK TESTING PRO-FORMA*


CHFm NT 1st half 2012

Restruct. expenses

NT excl. restruct. expenses

Savings included in H1

Run-rate savings

NT pro-forma

Revenue 60.8 60.8 60.8

Gross profit 24.9 4.9 29.8 (0.7) 3.7 32.8

Gross margin (%) 41.0% 49.0% 53.9%

Total functional costs (35.6) 3.9 (31.7) (1.1) 3.7 (29.1)

Amortization of intangible assets from acquisition (5.2) (5.2) (5.2)

Other income/(expenses), net (2.4) (2.4) (2.4)

EBIT (18.3) 8.8 (9.5) (1.8) 7.4 (3.9)

Amortization/depreciation 6.5 6.5 6.5

EBITDA (11.8) 8.8 (3.0) (1.8) 7.4 2.6

EBITDA margin (%) (19.4%) (4.9%) 4.3%

* without restructuring expenses but with savings

41

31.12.2011 30.6.2012

CHFm % CHFm %

Intangible assets 215.0 42.4 240.8 47.9

Other non-current assets 40.8 8.1 41.5 8.3

Non-current assets 255.8 50.5 282.3 56.2

Cash and cash equivalents 73.3 14.4 55.3 11.0

Other current assets 164.5 32.5 165.0 32.8

Assets of disposal group (held for sale) 13.2 2.6 - -

Total assets 506.8 100.0 502.6 100.0

Shareholders’ equity 203.8 40.2 200.1 39.8

Non-current liabilities 60.4 11.9 154.0 30.6

Current liabilities 152.8 30.2 145.2 28.9

Liabilities of disposal group (held for sale) 89.8 17.7 3.3 0.7

Total liabilities and shareholders’ equity 506.8 100.0 502.6 100.0

CONSOLIDATED BALANCE SHEET


DEVELOPMENT OF THE SHAREHOLDERS‘ EQUITY (in CHFm)


203.8

200.1

2.6

2.8

-8.7

-0.4

192

194

196

198

200

202

204

206

208

Balance at 31.12.2011

Group profit for the period

Distribution of share premium

(dividend)

Currency translation

adjustments

Other items Balance at 30.6.2012

43

DCF < NOA?

CONCLUSION: Annual impairment testing due in Q4/2012 but no indication for an impairment as of today. The terminal value of the CGU Network Testing is about 90%.

SYSTEMATIC OF IMPAIRMENT TESTING


Calculation of the discounted future cash flows of the goodwill carrying CGU (Network Testing)

DCF

Calculation of the net operating assets of the respective CGU

NOA

No impairment

No Impairment of the

DIFFERENCE between the DCF and the NOA

Yes

No impairment

No

44

2012 2013

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Reporting according to old accounting principles Effective date of IAS19R (1.1.2013) First time reporting according to IAS19R

IMPACT OF IAS19 „EMPLOYEE BENEFITS“ (REVISED)


CHFm 1st half 2011 1st half 2012

Net cash flow from operating activities 1.3 (9.7)

Net cash flow from investing activities (3.5) (87.1)

Net cash flow from financing activities (43.4) 78.9

Net decrease in cash and cash equivalents (48.6) (18.0)

Cash and cash equivalents at the end of the period 80.4 55.3

Net cash/(net debt) 42.8 (50.8)

CONSOLIDATED STATEMENT OF CASH FLOWS


55.8

-50.8

-61.5

-23.3

-12.0 -8.7 -1.1

-60

-40

-20

0

20

40

60

80

Net cash at 1.1.2012

Cash flow due to divestments

Cash flow due to acquisitions

Cash flow from operations and

other investments


(dividend)

Other cash flow Net debt at 30.6.2012

NET CASH TO NET DEBT


Net debt 30.6.2012

Net cash 1.1.2012

Cash flow divestments

Cash flow acquisitions

Cash flow operations &

other investments


(dividend) Other cash flow

47

[ ]

SUMMARY AND OUTLOOK


ASCOM IS COMMITTED TO PROFITABLE GROWTH

Ascom is well positioned in two global businesses with market leadership and with a clear focus on innovative software and hardware products, systems, solutions and services

Wireless Solutions to continue to generate profitable growth, especially in the healthcare communication market

Network Testing has the largest installed base, an innovative product portfolio, and as of 2013 a substantially reduced cost base (CHF 20m) – all this combined with global sales reach offers attractive opportunities

EBITDA target for 2013 confirmed: Ascom Group 14-15% EBITDA margin*


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

49

Financial targets for FY 2012* Certain market growth on Group level expected Lower net result year-on-year due to the additional cost measures and the difficult market environment for Network Testing: H1/2012: Group profit of CHF 2.6m achieved Additional restructuring expenses to reduce NT cost base by totally CHF 20m Network Testing expects better results in H2/2012 due to the measures initiated and the expected market recovery Wireless Solutions expected to end full-year 2012 both with top-line growth and higher EBITDA compared to 2011

OUTLOOK



50

Financial targets for FY 2013* EBITDA margin of 14-15% on Group level as target for 2013 confirmed: Wireless Solutions achieved a 15% EBITDA margin already in 2011 and has started the first two quarters stronger than last year Network Testing will benefit from a reduced divisional cost structure of CHF 20m in 2013 Moderate market recovery for Network Testing already expected for the second half of 2012

OUTLOOK



51

[ ]


GROUP CONTACT

Ascom Holding AG Investor Relations Stettbachstrasse 6 CH-8600 Dübendorf

T +41 31 999 11 11 F +41 44 823 13 21 [email protected]

www.ascom.com

52

mailto:[email protected]

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 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!

Date post:	27-Apr-2018
Category:	Documents
Upload:	lamanh
View:	219 times
Download:	2 times

Half-Year Results Presentation 2012 - Ascom€¦ · TEMS Investigation . TEMS Pocket . 29 . With...

Documents