WELCOME TO THE ASCOM MEDIA & ANALYST CONFERENCE 2011 FULL ... · WELCOME TO THE ASCOM MEDIA &...

WELCOME TO THE ASCOM

MEDIA & ANALYST CONFERENCE

2011 FULL -YEAR RESULTS

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2011 FULL-YEAR RESULTSFRITZ MUMENTHALER, CEOMARTIN ZWYSSIG, CFOCLAES ÖDMAN, GM WIRELESS SOLUTIONSRIKARD LUNDQVIST, GM NETWORK TESTING

22011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION

KEY MESSAGES

Ascom Group 2011: Solid results in a challenging business environment –stable revenue in local currencies with a good EBITDA-margin of 13.7%.

Wireless Solutions: excellent results confirm the continuous positivedevelopment. Upper limit of the mid term EBITDA target reached earlierthan planned.

Network Testing: unsatisfactory results due to weaker than expecteddemand (mainly in Q4), resulted in low profitability. Necessary measures implemented to achieve a substantial improvementalready in 2012.

Two Acquisitions - Miratel and Veelong - support profitable growth.

Former Division Security Communication: Divestment process of the corebusiness units close to completed.


[ ]

AGENDA

2011 RESULTS AT A GLANCE

OPERATIONAL FOCUS

2011 FINANCIAL RESULTS

HIGHLIGHTS FROM THE DIVISIONS

OUTLOOK AND STRATEGIC FOCUS


[ ]

2011 RESULTS AT A GLANCE


TOPLINE - STABLE DEVELOPMENT IN 2011

Slight increase of 1.1% for continuing operations

Total revenue of CHF 437.5m (FY 2010: CHF 472.9m)

strong impact of negative currency translation effects

slight increase of about 1.1% in local currencies

Wireless Solutions: Growth of 6.8% in local currencies (incl. six months of Miratel)

Network Testing: Decline of 6.9% in local currencies (adjusted for divestments)

Stable development of incoming orders Incoming orders: CHF 451.4m (2010: CHF 488.4m)

(Development in local currencies: +0.5%)

Book-to-bill rate positive


PROFITABILITY – GOOD EBITDA MARGIN OF 13.7%

EBITDA margin at good level of 13.7% despite negative currency effects EBITDA: CHF 59.8m

EBITDA margin: 13.7%

EBITDA guidance of 13–14% fulfilled

Net profit – continuing business in line with prior year Group profit: CHF 23.1m (2010: CHF 32.5m)

Net profit from continuing business amounts to CHF 30.6m

Loss from discontinued operations of CHF 7.5m


VERY STRONG RESULT FOR WIRELESS SOLUTIONS NETWORK TESTING HIT BY MARKET DEVELOPMENT

Wireless Solutions: outstanding result and beyond expectations Revenue growth of 6.8% (in local currencies) Improvement of the gross margin by 2.3 percentage points to 51.3% EBITDA increased to CHF 41.5m (2010: CHF 37.2m) Excellent EBITDA margin of 15.0% (2010: 13.1%)

Network Testing: unsatisfactory result – due to lower demand from customers and unfavorable business mix Revenue declined by 6.9% (in local currencies and adjusted for divestment effects) EBITDA considerably lower at CHF 3.4m (2010: CHF 27.7m) EBITDA margin decreased to 2.4% (2010: 16.4%)


DIVESTMENT SECURITY COMMUNICATION: CLOSE TO COMPLETE

Ascom Czech Republic MBO (closed on 10 October 2011) Divisional structure dissolved as of end of 2011 Defense Ruag (signed on 29 February 2012) Ascom Austria MBO (signed on 12 March 2012) Infrastructure Operators Trans Data Management AG (British owners)

(signed on 12 March 2012) Civil Security (about 40 FTE) Negotiations far developed

4 OUT OF 5 DIVESTMENTS COMPLETED ALL TRANSACTIONS CONSIDER INTERESTS OF EMPLOYEES AND

CUSTOMERS92011 Full-Year Results Conference, 15/03/2012 © Ascom Group 25 YEARS OF INNOVATION

SHAREHOLDERS – TAX FREE DISTRIBUTION OF CHF 0.25 PER SHARE OUT OF CAPITAL CONTRIBUTION RESERVES

Proposal to the Annual General Meeting of 18 April 2012:

Distribution of CHF 0.25 per share out of reserves from capital contributions

Total distribution of CHF 9m corresponding to a pay-out ratio of 39.0%

Exempt from Swiss anticipatory tax


[ ]

NETWORK TESTING

OPERATIONAL FOCUS


NETWORK TESTING – 2011 RESULTS

Weak demand in Q4 – in line with restrained spending of telco operators On a global level mobile telco operators reduced expenses and delayed

investments mainly in November and December. As a result demand declined unexpectedly. Traditionally strong November and December turned out to be much weaker.

Significant decline of profitability Gross margin decreased significantly due to lower top line and unfavorable

business mix. Functional costs were reduced by 11.9% despite the division made new

investments in the sales and distribution structure as well as in R&D. EBITDA of CHF 3.4m corresponding to an EBITDA margin of 2.4%.


4G IS UNDER WAY, BUT PACE OF ROLL-OUT SLOWER THAN ORIGINALLY EXPECTED*Over the last year 4G moved from a promise to a reality, with spectrum alreadyassigned in several countries and the first networks already rolled out commercially in2011.

Based on recent company actions, there’s little doubt that most major mobileoperators will invest in 4G networks – as staying out of the game would be too risky,from a competitive standpoint.

However, pace of 4G roll-out will depend on a number of factors, including spectrumavailability, financial health to make large investments, mobile broadband capacityconstraints with existing (3G/3.5G) technologies and market share.

Pace of roll-out slowing down, primarily driven by financial constraints on carriers,limiting their investment capacity, and desire to milk investments in HSPA and HSPA+(specially in Western Europe) before moving to LTE.

*specially in Western Europe


4G/LTE INVESTMENTS TO GROW BUT AT A SLOWER PACE

Overall, 4G/LTE investments are expected to grow at 79% CAGR between 2011 and 2014, even though the pace has slowed down in most geographies from what was projected 3 years ago

WEAPAC

Trends by region▪ In North America, 4G/LTE investments are

driven by aggressive roll-out by Verizon andefforts by other carriers to catch-up.

▪ In Europe, carriers are going slow with LTEinvestments, as they face macro economicchallenges and look to milk theirHSPA/HSPA+ investments.

▪ In APAC as well, LTE investments have beenslower than expected.

▪ In CALA, a key driver of investments isBrazil’s decision to accelerate LTE roll-outbefore the soccer world cup in 2014.

'09 Gartner forecastMEANA CALA

20142013201220112010

USD billions

2011 projection

2009 projection

8.7

5.9

7.5

3.8

5.2

2.22.9

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INVESTMENT CAPACITIES OF CARRIERS DETERMINE LTE ROLL-OUTS

Demand for mobile broadband continues to grow fast.

General revenue stagnation of carriers – the next wave of telco’s growth is not in the horizon yet.

Large CapEx requirements in the near future – 3G in emerging markets, 4G in mature ones.

Investment in network testing tools for 4G/LTE will partly be substitutive rather than incremental.

4G/LTE investments will largely substitute 2G investments from the past and slowly replace 3G investment.


TOTAL MARKET EXPECTED TO GROW MODERATELY

20122011

Overall, the total market across all segments we operate in is expected togrow 5% in 2012.

+5% p.a.

Roll-out

Optimization

Benchmarking

Post-processing

2012

~560

180-210

150-190

65-75

100-120

2011

~530

160-190

160-200

65-75

95-115

Total market projectionCHFm


NETWORK TESTING - TOP LINES INITIATIVES

Focus post-processing

▪ We have a strong product portfolio in post-processing now, with the acquisition of Veelong (January 2012).

▪ There is considerable room for growth in this area, as we are starting from a small base.▪ We plan to further integrate our post-processing products with rest of our product portfolio

and add sales resources to aggressively pursue opportunities in this area.

FocusWestern Europe

▪ We are under-represented in Western Europe and plan to rapidly address the situation through a focused sales and marketing push.

▪ The upcoming 4G/LTE upgrade cycle in Western Europe provides an opening to us –with our technological lead over competition in 4G/LTE, we are well positioned to gain share in the market.

Focus 3rd party service providers

▪ We have identified 3rd party services providers as a key growth area and plan a concerted effort to build our presence in the segment.

▪ We have identified key Service Providers to pursue and developing product and pricingstrategy to address the needs of this segment.

Develop alternate paths to market

▪ We grew our re-seller business in 2011, and plan to build on that momentum by continuing to strengthen our relationship with re-sellers.

▪ We plan an e-commerce push to capture the long tail of small customers that can be most efficiently handled online.

Focus on growing market segments and on parts of the market where ourposition is under-represented.


NETWORK TESTING – PROFITABILITY IMPROVEMENTS

Primary focus is to adapt the NT cost structure to the current realties withthe target to re-establish the profitability level.

Restructuring will lead to reduction of cost run rate in the order of magnitude of CHF 10m p.a.

Restructuring and reorganization to take place in 2012: Budget of CHF 10m (order of magnitude) has been earmarked Concentration of sites Streamlining of product lines Further leveraging synergies for productivity enhancement


[ ]

2011 FULL-YEAR FINANCIAL RESULTSDR. MARTIN ZWYSSIG


CURRENT REPORTING STRUCTURE

2011 Full-Year Results Conference, 15/03/2012 © Ascom Group

Ascom

Wireless Solutions

Network Testing Real Estate

FAM

Real Estate

Corporate Discontinued Operations

Defense

Civil Security

InOp

Austria

Czech Rep.

signed

sold

sold

signed

2025 YEARS OF INNOVATION


CHFm 2010 2010 FX-adj. 2011Revenue 472.9 432.2 437.5Gross profit 244.8 218.9Gross margin 51.8% 50.0%Total functional costs (189.1) (179.3)Amortization of intangible assets from acquisition (10.5) (9.4)Other income/(expenses), net 6.2 10.4EBIT 51.4 48.1 40.6Net financial result (5.8) (6.6)Income tax (9.8) (3.4)Profit for the period from continuing operations 35.8 30.6Loss for the period from discontinued operations (3.3) (7.5)Group profit for the period 32.5 23.1EBITDA from continuing operations 70.9 66.1 59.8EBITDA margin 15.0% 15.3% 13.7%

CONSOLIDATED INCOME STATEMENT


Actual2010

Organicgrowth(in %)

FX translation(in %)

Acquisition/divestment (in CHFm)

Actual2011

Δ 2011/2010(in %)

Wireless Solutions 282.9 5.1% -9.0% 4.7 276.6 -2.2%

Network Testing 168.5 -6.9% -9.0% -2.7 138.9 -17.6%

Real Estate 22.4 0.8% -0.7% n/a 22.4 0.1%

Total Ascom 472.9 0.7% -8.6% 2.0 437.5 -7.5%

GROWTH ANALYSIS


11%

65%

17%

7%

SwitzerlandEurope & AfricaAmericasAsia/Pacific

REVENUE SPLIT PER REGION

7%

80%

11%

2%

4%

46%

31%

19%

Wireless Solutions

NetworkTesting

(in %)


FUNCTIONAL COSTS DEVELOPMENT(in mCHF)

189.1

174.9179.3

(14.2)4.7 0.9 (1.2)

165170175180185190195

Total 2010 FX-adj. 2010 FX-adj. Marketing & Distribution

Research & Development

Administration Total 2011

189.1

174.9179.3

(14.2)7.0 (2.9) 0.3

165170175180185190195

Total 2010 FX-adj. 2010 FX-adj. Wireless Solutions

Network Testing

Real Estate/Corporate

Total 2011


CONSOLIDATED BALANCE SHEET


31.12.2010 31.12.2011CHFm % CHFm %

Intangible assets 221.5 38.1 215.0 42.4Other non-current assets 39.9 6.9 40.8 8.1Non-current assets 261.4 45.0 255.8 50.5Cash and cash equivalents 129.0 22.2 73.3 14.4Other current assets of continuing operations 189.9 32.8 164.5 32.5Assets of disposal group classified as held for sale 13.2 2.6Total assets 580.3 100.0 506.8 100.0Shareholders’ equity 189.0 32.6 203.8 40.2Non-current liabilities 83.9 14.4 60.4 11.9Current liabilities of continuing operations 307.4 53.0 152.8 30.2Liabilities of disposal group classified as held for sale 89.8 17.7Total liabilities and shareholders’ equity 580.3 100.0 506.8 100.0



DEVELOPMENT OF THE SHAREHOLDERS‘ EQUITY (in CHFm)

189.0

203.8

23.1 -8.6

0.3

175.0

180.0

185.0

190.0

195.0

200.0

205.0

210.0

215.0

Balance at 1.1.2011

Group profit for the period

Dividend paid Other items Balance at 31.12.2011



CHFm 2010 2011

Net cash flow from operating activities 46.2 16.4

Net cash flow from investing activities (11.4) (4.5)

Net cash flow from financing activities (27.2) (66.7)

Net increase/(decrease) in cash and cash equivalents 1.3 (55.7)

Cash and cash equivalents at 31.12. 129.0 73.3

CONSOLIDATED STATEMENT OF CASH FLOWS


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HIGHLIGHTS FROM THE DIVISIONS


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WIRELESS SOLUTIONSCLAES ÖDMAN

www.ascom.com/ws


http://www.ascom.com/ws�

WIRELESS SOLUTIONS – EXCELLENT RESULTS IN 2011

Organic growth of 5.1% Direct channel sales grew in almost all regions in particular in US and Germany. OEM business continued to develop well. Signing a new OEM agreement in 2011. Indirect channel with international sales partners developed satisfactorily. Positive

trends in the new markets in Middle East, Russia, Central and Eastern Europe.

Revenue growth of 6.8% in local currencies (including six months of Miratel). Incoming orders increased by 7.2% (in local currencies).

Strong performance – increasing operational efficiency Significant increase in profitability Gross margin increased by 2.3 percentage points EBITDA margin of 15.0% (2010: 13.1%)


WIRELESS SOLUTIONS – ACHIEVEMENTS AND TRENDS

Achievements in 2011 Achievement of ISO 13485 certification (ISO standard for the design and manufacture

medical devices). Relevant software cleared for US (FDA) and Europe (MDD). In December 2011, opening of a test center in Russia as an important part of the long-

term R&D strategy. Acquired the Finnish healthcare communication company Miratel Oy.

Market trends Continuing trend towards an increased use of IP standards. Focus on mobility solutions based on IP-DECT and WiFi. Smart phone applications are starting to enter the healthcare market, cellular

technology increasingly recognized for enterprise solutions. Nurse call systems are a key application in the integration process and to drive patient

safety and satisfaction.


SUPPORTING NURSE PRODUCTIVITY

ACTIVITYREPORT

CARE

MONITOR

COMMUNICATE


ASCOM WIRELESS SOLUTIONS PORTFOLIO

2011 Full-Year Results Conference, 15/03/2012 © Ascom Group 33

IP-DECT WiFi Paging Nurse Call Elderly Care

Services

Installation, Integration, Support, Maintenance

3rd Party Devices

Alarm-Management, Applications, Solutions

System-Management, Integration Middleware (MDD/510K)

HandsetsBase-StationsIP-DECT Gateway

Handsets Care Gateway3rd party Care Phones

Nurse CallIP-Nurse CallWireless Nurse Call

PagersAlarm-DevicesInfrastructure

UNITE ClientsGSM/3G/LTEWiFi


DEVELOPED SMARTPHONE APP


WAVEFORMS FOR CRITICAL ALARMS


WIRELESS SOLUTIONS – FOCUS ITEMS 2012

1 FURTHER INVESTMENT IN SALES CHANNELS Further growth in the own channel, particular in North America Gaining market share in new markets (Middle East, Central & Eastern Europe)

3 INVESTMENTS IN NEW PRODUCTS AND BUSINESS FIELDS Enhance mobility offers with new features Broaden the existing product offering Address the independent living/home care segment

2 PREPARE FOR FURTHER GROWTH Striving for further organic growth Growing business by acquisitions continues to be a priority (mainly companies

with a strong portfolio in the healthcare sector)


[ ]

NETWORK TESTINGRIKARD LUNDQVIST

www.ascom.com/nt


http://www.ascom.com/nt�

Markets weaker than expected – slow-down particularly in late 2011 After a strong 2010, North America was negatively affected by cancelled merger of

T-Mobile/AT&T late 2011. EMEA region at stable currency slightly below prior year. European financial crises

offset by increasing demand in Middle East and Southern Africa. Asia Pacific showed moderate growth in stable currencies, driven by build out of the

reseller network, successful fight against software piracy in India and new network roll-outs in Korea and Australia.

Substantial negative currency effects and market slow-down weakened profitability Weakening of USD/EUR with significant negative impact on bottom line. Gross margin decreased due to unfavorable business mix, in particular increased

resale of scanning receivers. Lower EBITDA of CHF 3.4m and EBITDA margin of 2.4%.

NETWORK TESTING – CHALLENGING ENVIRONMENT IN 2011


NETWORK TESTING – ACHIEVEMENTS AND TRENDS

Achievements in 2011 Expansion of the LTE offering across the whole product portfolio including launch of

new HW platforms (RTU-5, MTP-4) for Benchmarking & Monitoring. Frost & Sullivan award for market leadership in Test & Measurement. Strong growth of TEMS Discovery sales, confirming our lead in LTE post processing. Established several new partnerships with chipset and device vendors with particular

focus on LTE (including TD-LTE).

Market trends Strong demand for mobile broadband services remains. Meeting the demand requires

investments in network capacity, new technologies and Network Testing solutions. In the short term, invest climate is dampened by disruption of operator value chains

and macro-economical uncertainties. Operator outsourcing and rise of Chinese network equipment vendors impacts

addressable opportunities.


NETWORK TESTING – OFFERINGNETWORK TESTING – OFFERING

TEST & MEASUREMENT BENCHMARKING & MONITORING REPORTING & ANALYSIS

TEMS Investigation

TEMS Symphony

TEMS Automatic

TEMS VisualizationTEMS Monitor MasterTEMS Pocket

TEMS Discovery


NETWORK TESTING – FOCUS ITEMS 2012

1 IMPROVE PROFITABILITY Cost measures to re-establish profitability level Expansion of indirect sales channels Drive TEMS Discovery business

3 CONTINUE TO INNOVATE Invest in expanded leadership in smart-phone integration Leverage device partnerships to bring unique value to customers Reporting & Analysis expansion – launch of TEMS Discovery Enterprise

2 LEVERAGE MARKET LEADERSHIP Provide Solutions that drive operator efficiency and promotes portfolio value Utilize common components across portfolio Partner to drive speed and efficiency of in-building deployments and optimization


[ ]

ASCOM 2.0

OUTLOOK AND STRATEGIC FOCUS


CONSISTENT GROWTH STRATEGY

Ascom will continue to consistently pursue its corporate strategy it adopted in 2004 and concentrate on Mission-Critical Communication in the business-to-business strategy.

Wireless Solutions and Network Testing are both market leaders in their respective markets. Both see good opportunities to expand and to further develop their business and their market share organically and through acquisitions.

Thus Ascom will continue to explore opportunities for targeted, value-adding acquisitions in Wireless Solutions and as well as in Network Testing.


25 YEARS OF INNOVATION 44Presentation Name Month Year, © Ascom CONFIDENTIALASCOM 2.0 – A TRULY INTERNATIONAL COMPANY

Ascom headquarters

Ascom local presence

Reston (Network Testing)

Dübendorf/Zurich(Group Headquarters)

Göteborg (Wireless Solutions)

ASCOM 2.0 – SIX CORNERSTONES


Underlying megatrends support the growth

Two globally oriented businesses, targeting selected market segments, both leaders in their markets1

Software and hardware products, systems, solutions and services2

Dedicated to innovation, spending more than 10% p.a. on R&D3

4

Rigorous performance culture, cost conscious, customer oriented5

Profitable businesses that need to grow, expand, develop and to improve their bottom line 6


Miratel is the clear market leader in nurse call solutions, communication and personal security systems for hospitals and care facilities in Finland.

Miratel has over 40 years’ experience in nurse call systems and Ascom gets access to its strong installed base with a remarkable service business.

Ascom further strengthened its leading position as a provider of communication solutions for the healthcare sector.

The acquisition gave Ascom the leading market position in the healthcare segment in Finland.

Miratel is an excellent strategic fit for Wireless Solutions.

ACQUISITION OF MIRATEL: ANOTHER STEP TOWARDS GLOBAL MARKET LEADERSHIP IN HEALTHCARE COMMUNICATION


ACQUISITION OF VEELONG ENHANCES POSITION IN REPORTING AND ANALYSIS MARKET SEGMENT

Veelong is a premium developer of advanced solutions for post-processing analysis of mobile network testing data.

Five key employees, including the two founders, will join Ascom Network Testing.

The complete integration of Veelong capabilities within Ascom Network Testing is expected to streamline and accelerate development of the division’s postprocessing solution, TEMS Discovery.

Ascom further strengthened its current position in the reporting and analysis market segment.


OUR MANAGEMENT TEAM

CEO

Fritz Mumenthaler*

BOARD OF DIRECTORS

CFO**

Martin Zwyssig*

* Member of the Executive Board** The CFO is also responsible for Investor Relations and Real Estate.

General Secretary/Comm Daniel LackHuman Resources Kurt RenggliGeneral Counsel Judith Bischof

Wireless Solutions

Claes Ödman*

Network Testing

Rikard Lundqvist*


OUTLOOK

Financial medium-term targets for 2013*:

EBITDA margin 14-15%

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


ASCOM IS WELL POSITIONED TO CREATE VALUE

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.

EBITDA margin target for 2013 remains 14-15%.

Solid balance sheet with a strong equity ratio.

New credit facility arrangement further enhances the strategic flexibility and is a strong base for the targeted investments.

Substantial efforts being made to re-establish profitability level at Network Testing.

Investment will be off-set by book gain from divestment of Security Communication core businesses.

Continuous focus on organic growth opportunities and acquisitions.


[ ]

GROUP CONTACTAscom Holding AGInvestor RelationsStettbachstrasse 6 CH-8600 Dübendorf

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

www.ascom.com


http://www.ascom.com/�

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 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.


[ ]

THANK YOU!


http://www.ascom.com/en�

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