Full-Year Results Presentation 2015 - Ascom...Healthcare integration market 10% CAGR to USD 3 bn...

WELCOME TO ASCOM’S 2015 FULL-YEAR RESULTS CONFERENCE

ANNUAL MEDIA CONFERENCE | 9 MARCH | ©2016 ASCOM 1

• Ascom‘s 2015 Performance Fritz Mumenthaler, CEO

• 2015 Financial Results Bianka Wilson, CFO

• Outlook Fritz Mumenthaler, CEO

AGENDA 9 MARCH 2016


HIGHLIGHTS 2015 – Progress towards ASCOM 2020 (I)

•Solid development in Healthcare• Growth in acute care facilities 8% (at constant currencies)

• Bolt-on acquisition of software company UMS in Italy

•Myco launched according to schedule• Well received by customers

• Eco-system of applications is gaining momentum

•Success in Tier-1 hospitals globally• Nya Karolinska (SWE)

• Humber River (CAN)

• VCCC Australia (AUS)

• Erasmus University Medical Center (NL)


HIGHLIGHTS 2015 – Progress towards ASCOM 2020 (II)

•Wireless Solutions• Strong market development in North America and

DACH Region

• UMS is an excellent strategic fit and accelerates Ascom roadmap for medical device integration

• Strategic alliance with Tyco SimplexGrinnell opens up so far underserved territories in North America

•Network Testing• Evaluation of strategic options progressing with various

interested parties (strategic and financial investors)

• Divestment of Systems & Solutions underpins strategic intentions

• Restructuring implemented


Network Testing

26%

Wireless Solutions

74%

Net Revenue Group (Divisions)

ANNUAL MEDIA CONFERENCE | 9 MARCH | ©2016 ASCOM

Wireless SolutionsWIRELESS SOLUTIONS

5


Global Healthcare integration

market10% CAGR to USD 3 bn

Global Healthcare

software spend13.3% CAGR to USD 51 bn

6

Global Healthcare Market – Promising Growth

Ascom addressable market

for Workflow Solutions and

Healthcare ICT~USD 7 bnHealthcare

Industry in EU represents over

10% of GDP

Healthcare drives wireless

solutions market

opportunity

Sources: Ovum Healthcare IT Spend 2018, OECD Healthcare Statistics 2015, Market & Markets Integration Study 2015

Healthcare – growing in importance


Non Healthcare

40%

Healthcare60%

Net Revenue Wireless Solutions

Non Healthcare

33%

Healthcare67%

Net Revenue Wireless Solutions(Excl. OEM)


By managing Mission Critical Communication in HC…

Services only

Third Party Products

only

…we address hospital KPI’s…

•

• Hospital efficiency & financial performance

• Patient safety and patient satisfaction

• Caregiver experience

• Regulatory compliance

Hospital main concern areas

• Patient safety index• Harm events/patient day• Patient satisfaction index• Patient waiting times• Patient length of stay• Cost per patient day• Number of patient days• Cost per discharge• Lab turnaround time

Hospitals KPI’s


10

IT Operations

Security and cost

Patients

Feel well and safe

Frontline staff

Solve daily problems

Operational management

Efficient operations

C-suite executives

Achieve financial targets

… and interact with all hospital stakeholders


Wireless Solutions established new solutions unit

• Developing partners who are relevant to solution selling (Myco ecosystem)

• Leveraging existing solutions in the regions and developing new solutions (so called Global Repeatable Solutions)

• Support regions to develop new solution opportunities and delivering complex projects

• Ensuring more solution focus in R&D

• Improving internal systems to support solution sales (opportunity management, automatic quoting)


2,500 births per year

18 family rooms in neonatal

intensive-care unit


The Ascom solution –Neonatal intensive careKuopio University Hospital Finland

• Ascom Myco• Unite Messaging

Suite• Ascom Cardiomax• Unite Assign• Ascom Innova

Nursecall

12

Myco at work since May 2015

New state-of-the-art

neonatal intensive-care

unit

http://www.ctvnews.ca/health/a-look-inside-n-america-s-first-fully-digital-hospital-1.2588116

http://www.ctvnews.ca/health/a-look-inside-n-america-s-first-fully-digital-hospital-1.2588116

Myco’s World of Healthcare Applications


Signed Partners:

Partners in the onboarding stage:

Ascom Technology Partner Program - Overview

Applications include:Dictation/Transcript, Workflow Optimization, Decision Support, Medication Administration, EHR, Automated Vital signs/Patient Monitoring, Care Registration, Clinical Video Services

14

ACLS Solutions


Medanets for caregivers• Reducing errors radically, in average 75%• Significant cost savings, up to 150 hours per month per ward• Better job satisfaction

Direct access to patients’ Electronic Health Records• Patient measurements• Medication• Pain care filings• Early warning scoring• Checklists and acknowledgments• Automatic transfer of vital signings from central patient monitoring

systems to EHRSupported marketsAt the moment EU

App language supportFinnish and English, More coming soon

Medanets mobile point-of-care app for caregivers


Screen shots application workflow

Menu drawer Scanning patientSelect patient



Patient selectedoverview

Work in progress,heart rate

Parameters menu(dynamic, customizable)


Mother’s Milk eliminates feeding errors in neonatal intensive-care units (NICU) through mobile barcode scanners, printers and positive patient identification verification. Targeted segment is Healthcare-Hospitals, clinics, NICU.

Main features

• Barcode scanning • Mobile printing at point of care • Verification technology assures correct feedings• Access to real time reporting through H-Gateway portal

Supported markets North AmericaApp language supportEnglish


Screen shot of the app

Neonatal intensive-care units – Eliminating feeding errors

18


Select infant wristband to identify patient.

Scan milk bottle to verify a match.

If the match is incorrect, the above screen will show the misidentification,

preventing feeding errors.


19

Wireless Solutions is well under way

• Healthcare part of the business is growing above average

• The non-health care part of the business remains important, but the strategic focus is on healthcare, where we see the best growth opportunities

• North America has recovered and showed impressive growth in 2015

• Transformation towards a Solution Provider gains traction – but takes time

• Customer feedback on Myco is positive and the App Eco-system is populating fast

• The winning of large projects in Tier 1 hospitals across the globe shows, that Wireless Solutions are on the right track


NETWORK TESTING


Ranplan partnering improves market position of Network Testing

• In-building and small cells increasing rapidly to meet capacity demands

• Number and location of sites makes rollouts costly and hard to manage

• Ranplan partnering gives Network Testing exclusive ability to integrate, market and sell end-to-end in-building design solution – driving efficiencies

• Initial market response positive


Network Testing with exclusive access to China Mobile

• China Mobile, the worlds largest wireless operator, in 2015 selected only 3 partners to provide network testing solutions for LTE and VoLTE deployments

• Based on extensive evaluations Network Testing was the only non-Chinese vendor selected

• This reaffirms our position as the leader in this space and supports further business opportunities with service companies as well as infrastructure providers in the Chinese market.


Service assurance business reflects market growth

• Complex networks are difficult to test –end-user experience is true measure

• Diverse services are impacted by various degradations and failures that need to be identified in order to solve performance problems for operators

• Service assurance solutions from Network Testing looks at services from the user’s perspective

• Widely adopted by Tier-1 North American operators

• Incremental potential worldwide


VoLTE-Testing is a key business driver for Network Testing

• Deploying “Voice over LTE” (VoLTE) is key to increase the network efficiencies

• Due to the variety of implementations from multiple vendors deployment is not easy to manage

• VoLTE-related support and expertise from Network Testing is a key business driver for incremental updates/upgrades and competitive swap-outs


2015 Financial Results

Bianka Wilson


2015 results at a glance


cc = at constant currencies

WS Division+7.1% cc

WS Acute Care

+8% cc Backlog

(end of 2015)CHFm135.2

NT Division

(before restructuring)

2.7%

WS Division15.0%

WS Division +3.7% cc

Group profit CHFm24.3

Free cash flow

CHFm20.0

EPSCHF 0.69

EBITDAmargin

(before restructuring)

11.6%

NT Division -4.5% cc

WS North

America+18% cc

AscomGroup EBITDA

margin10.7%

Net revenue CHFm410.8

Conversion to Swiss GAAP FER


Goodwill offset to equity and limited P&L impact

107.94.6

242.9

29.6

Share-holders’ equity IFRS

Share-holders’ equity Swiss

GAAP FER

Goodwill

-169.0

Pension liabilities

-0.2

Other liabilities

Deferred tax

0.1

Group profit Swiss

GAAP FER

Group profit IFRS

-0.9

Pension expenses

38.5

-0.2

Deferred taxexpenses

37.5

Other operating expenses

Adjustments in equity per 31.12.2014 Adjustments in Group profit for the period of 2014

Equity ratio

(end of 2015) 40.7%(CHFm)

Growth analysis


2014

117.3

450.4

Wireless Solutions (WS) 333.3

Network Testing (NT)

(CHFm) Organic

-8.6%

-1.2%

+1.5%

M&A

0.0%

+0.2%

+0.2%

FX

-5.2%

-7.4%

-8.2%

2015

101.1

412.5

311.8

∆ 15/14

-13.8%

-8.4%

-6.5%

2014

119.0

437.7

Wireless Solutions (WS)

Ascom Group

318.9

Network Testing (NT)

(CHFm) Organic

-4.5%

+1.3%

+3.5%

M&A

0.0%

+0.2%

+0.2%

FX

-5.6%

-7.6%

-8.3%

2015

107.0

410.8

304.2

∆ 15/14

-10.1%

-6.1%

-4.6%

Ascom Group

Incoming orders

Net revenue


WS Division – Net revenue development

By customer segment By region(CHFm, % based on figures at actual currencies)

9%

6%

5%

59%

9%

12%

2014

318.9

10%

12%

60%

5%

3%

10%

2015

304.24%

21%

20%

15% 20%

20%

2014

318.9

19%21%

19%

5%

17%

19%

2015

304.2

WS – Profitability impacted by investments and FX


6.1

-3.7

FX impact

45.5

Others

-6.3

Gross margin

-1.7

VolumeEBITDA2014

55.8

EBITDA2015

-4.7

Invest-ments

(CHFm, figures and % based on actual currencies)

* Mainly due to 2014 one-off’s and increased Corporate charges allocations

*

EBITDAbridge

31

WS – Half-yearly seasonality


Half-yearly view


1) Figures according to IFRS 2) Derived from full-year figures according to Swiss GAAP FER

157.0147.2

178.1

140.8

H2/2014

22.7%

52.6%

H1/2014

51.1%

11.0%

49.5%

H2/2015

14.4%

H1/2015

15.5%

49.9%

Gross margin EBITDA margin Net revenue H2

2)2) 1)1)

Net revenue H1

32


NT – Net revenue development

33

By customer segment By region(CHFm, % based on figures at actual currencies)

15%

11%

27%

47%2014

119.0

12%

12%

32%

44%2015

107.0

21%

34%

34%

11%

2014

119.0

30%

20%

13%

37%

2015

107.0

NT – Profitability impacted by difficult H2 and restructuring


EBITDABridge

(as reported)

* Mainly due to increased Corporate charges allocations, bad debt provision, 2014 one-off’s and FX impact


-1.1

2.6

10.6

SySo TEMS volume&margin

EBITDA2014

OthersTEMSre-

structuring

-3.5

-4.0-2.7

SySodivestment

gain

EBITDA2015

-4.1

*

Testing business

TEMS (pro forma)

4.0

7.0

-1.1

SySodivestment

gain

-2.6

EBITDA loss 2015

SySo

2.7

EBITDA2015 NT Division

Pro forma EBITDA

2015 TEMS

Corporate charges

TEMSre-

structuring

4.0

7.5% Pro forma

EBITDA margin2015TEMS2015 EBITDA

adversely impactedby USD 8m

postponed T&M netrevenue volume

related toUS operator

60% TEMS gross margin 2015

before re-structuring

NT – Half-yearly seasonality



1) Figures according to IFRS 2) Derived from full-year figures according to Swiss GAAP FER

52.766.3 54.6 52.4

12.6%

54.4%

H1/2014

0.6%

54.0%

H2/2014

4.3%

54.2%

H2/2015

-2.8%

46.0%

H1/2015Net revenue H1EBITDA marginGross marginNet revenue H2

Half-yearly view

2)2) 1)1)

51% Full year gross

margin excludingrestructuring

2.7% Full year

EBITDA marginbefore

restucturing

EBITDA to group profit reconciliation


Depreciation and amortization key driver


6.10.4

Non-core Real-estate activities

Net FX gainsDepreciation / amortization

-16.5

Group profit2015

24.3

-1.7

-7.8

Income taxNet interest and other financial

expenses / income

43.8

EBITDA2015


Solid cash flow generation as basis for growth

6.0

43.4

50.2

-10.1

DividendsNet debt repayments

Income tax paid

Cash at 1.1.2015

-15.8

-13.3

CapExOper. cash flows excl. tax

Other cash flows

Cash at 31.12.2015

57.4-3.0

Investments and dividends financed by operating cash flow



Healthy balance sheet

-40

-20

0

20

40

60

80

100

31.12.201531.12.2014

NWC PPEIntangible assets Provisions

Key balance sheet positions Net cash/debt and equity ratio

37.327.1

-40

-20

0

20

40

60

31.12.2015

34.4%40.7%

31.12.2014

BorrowingsNet cashCash and equivalentsEquity ratio (in %)

(CHFm, % based on figures at actual currencies)

Improved balance sheet quality, re-financing in progress


Return to shareholdersDividend per share proposed at CHF 0.45, continuing the commitment to cash return

1.07

0.69

1.07

201520142013 *

Basic earnings per share (EPS)

* Figures according to IFRS

** Calculated on gross dividend amount multiplied by issuedshares divided by Group profit as reported in the financial statements of Ascom Group

Dividend per share

0.40 0.45 0.45

201520142013 *

proposed

Pay-out ratio **39%* 43% 67%

Note: Annual distribution per share based on prior year’s profit, i.e. dividend proposed to 2016 AGM based on the profit for the year 2015.

(CHF, % based on figures at actual currencies)

OUTLOOK


Outlook


Wireless Solutions

• Revenue growth 2016/17 5 – 10%*

• EBITDA margin 2016/17 14 – 18%

• We expect for 2016 a distinctivelystronger H2

*at constant currencies

41

Outlook


Network Testing

• Progressing on evaluation of strategic options

• Restructuring already implemented

• Return to growth combined withsignificant improvement in profitabilityfor the full year

• Expecting for 2016 a clearly strongersecond half-year

42

Wireless Solutions Division

• Accelerate the transformation towards a Solution Provider for workflow intelligence in Healthcare

• Grow Solutions business with Myco, Unite and Services

• Leverage our network of partners

• Relentlessly follow R&D roadmap to further enhance our SW capabilities

• Continue to investigate bolt-on acquisitions in the Healthcare ICT space

• Operational excellence for Vision 2020

Key priorities for 2016


Network Testing Division

• Complete evaluation of strategic options for Division

• Return to profitable growth

• Build up the business in the small cell network space (partnering with Ranplan)

• Continue to build the business in APAC

• Further strengthen the business with the Tier 1 operators in the US

• Maximize the VoLTE opportunity with key accounts - mainly in Europe

Solid shareholder return

Proposal to theAnnual General Meeting 2016:

•Pay-out of a dividend of CHF 0.45 per share

• Dividend yield of around 3% for 2015• Pay-out ratio of 66.7% (2014: 43.2%)


ASCOM 2020 – ACCELERATE, INNOVATE, DELIVER


Leveraging investments to accelerate

businessgrowth

ASCOM 2020

2015 a strong

platform for growth

Focusing on healthcare

ICTmarket

Creating sustainable, higher, and

more predictable

returns

45

ASCOM 2020>75% of Revenue

from Healthcare

ASCOM 2020>25% of Revenue

from Connectivity

Software

ASCOM 2020>50% of

revenue from solutions and

service

THANK YOU


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.


Ascom Holding AG

Zugerstrasse 32Baar, Switzerland

Phone: +41 41 544 78 00


www.ascom.com

www.linkedin.com/company/ascom

48

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https://www.linkedin.com/company/ascom-wireless-solutions

http://www.ascom.com/ws/en/index-ws/

http://www.ascom.com/ws/en/index-ws/

http://www.ascom.com/

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Full-Year Results Presentation 2015 - Ascom...Healthcare integration market 10% CAGR to USD 3 bn...

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