Annual Media Conference 2017 Welcome
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Annual Media Conference 2017
Welcome
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Agenda 9 March 2017
Financial Review, CFO Business Review, CEO Customer Presentation, UK Customer Presentation, Italy Guidance, CEO Q&A Product Demonstration
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Annual Media Conference 2017
Bianka Wilson, CFO
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Legal DisclaimerThis 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.
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2016 – a year of major changes in Ascom
Implementation of the new OneCompany organization
Strategic business focus on Healthcare ICT and mobile workflow solutions
Dedicated focus on organic growth and increased profitability
Ascom has a strong balance sheet with solid net cash position and equity ratio
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Key messages
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2016 financial results in summary (I)
2016 financial result reflects the major strategic transformation in 2016
2016 includes 9 months of Network Testing Division operating result through30 September 2016 and the loss resulting from the divestment
Both half years 2016 marked by one offs impacting EBITDA, Group loss and loss per share
Better H2 2016 with significantly stronger profitability in the continuing Ascombusiness (former Wireless Solutions Division)
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2016 financial results in summary (II)
5% growth in the Healthcare segment 17% organic growth in Software Successful integration of UMS (acquired January 2016) Decline in OEM and DECT Mobility Double digit growth in Growth Markets Low single digit growth in Europe (excluding OEM) North America impacted by slower than expected ramp up of channel partners Short-term adverse impact in H2 2016 due to OneCompany reorganization OneCompany savings already starting to be realized in Q4 2016
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Key developments in the continuing business (former Wireless Solutions Division)
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2016 results marked by transformation and one-offs (I)
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(CHFm, except %) AscomGroup
Network Testing
Pro forma OneCompany
(incl. one-offs)
2016 one-offcharges
Pro forma OneCompany
(excl. one-offs)
Incoming orders 360.4 57.5 302.9 302.9
Net revenue 354.3 53.8 300.5 300.5
Gross profit 177.5 25.5 152.0 -1.2 153.2
Gross profit % 50.1% 47.4% 50.6% 51.0%
EBITDA 16.9 -11.7 28.6 -13.1 41.7
EBITDA % 4.8% n/a 9.5% 13.9%
EBIT 1.3 -20.0 21.3 -13.1 34.4
EBIT % 0.4% n/a 7.1% 11.4%
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2016 pro forma OneCompany EBITDA bridge
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Pro forma EBITDAbridge
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41.7
28.6
1.444.9
Pro forma EBITDA
incl. one-offs
(Dec 2016)
Others Pro formaEBITDA,
excl. one-offs
(Dec 2016)
-0.8
Corporate one-offs
in H1
M&SandR&D
investments
-2.1
-10.6
MarginVolume
-1.7
Pro forma EBITDA
(Dec 2015)
OneCompany restructuring
costs
-2.5
Note: Pro forma EBITDA comprises Ascom Group EBITDA minus the EBITDA result of the Network Testing Division in the respective year.
(CHFm, figures at actual currencies)
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2016 results marked by transformation and one-offs (II)
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(CHFm) Ascom Group
Operating result (EBIT) 1.3
Financial result -2.9
Ordinary result -1.6
Non-operating result -0.6
Extraordinary result -145.1
Loss before income tax -147.3
Income tax 1.6
Group loss -145.7
Extraordinary loss
Network Testing net assets 60.6
Effect from recycling of goodwill and currency translation adjustments
127.8
Costs incurred in connection with the disposal
5.1
Less cash received -29.2
Less consideration receivable
-19.2
Extraordinary loss 145.1
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Strong balance sheet going forward
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31.12.2015
Disposal of Network TestingDivision as of 30.09.2016
31.12.2016Net book
value divestedConsideration
receivedNet cash 37.3 -9.1 29.2 24.1
NWC 75.9 -31.7 56.8
Total assets 286.4 -86.1 48.4 225.1
Equity / net assets 116.7 -60.6 48.4 80.9
Equity % 40.7% 35.9%
(CHFm, except %; figures and %based on actual currencies)
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Wireless Solutions: Net revenue developmentBy customer segment By region
(CHFm, except %; figures and % based on actual currencies)
11%
3%
5%
10%
10%
60%
2015
304.2
5%
9%
9% 63%
9%5%
2016
300.8
5%
19%
15% 19%
17%
15%10%
2015
304.2
5%
19%
17% 17%
17%9%
16%2016
300.8
OEM
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Wireless Solutions: Half-yearly view shows margin strength
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Half-yearly view
(CHFm, except %; figures and % based on actual currencies)
* Pro forma (PF) result excluding one-off charges of CHF 1.2m impacting gross margin and CHF 10.4m impacting EBITDA margin
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Cash flow generation(CHFm)
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Annual Media Conference 2017
Holger Cordes, CEO
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Short reminder: ascom closes digital information gaps allowingfor the best possible decisions - anytime and anywhere.
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We do this with unique comprehensiveness and unrivalled innovation - from the point of care to anywhere!
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Emergency Room System
Operating Room System
Radiology System
Lab, Pharma etc.
Patient Record
(desktop)
Patient Administration
System, Billing
(desktop)
Clinical staff
Medical Devices
Infusion pumps
Patient Beds etc
Purpose built devices
Device connectivity
Data interoperability
Workflow supporting software
Nurse Call
Alarm management
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Challenging year in transformation with decent results
OneCompanyprogram executed
Innovation focus on Healthcare ICT and point of care
Attained 63% Healthcare share through 5% growth
2016: Building for the future
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Ascom converted from a divisional and fragmented set-up to a OneCompanyfunctional, sales driven organization
Recruitment of new talents Software Development Executive
New Managing Director Benelux New Managing Director Asia Several executives in our services
organization
26 new sales resources worldwide, especially in the US
OneCompany organization finalized
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Important wins in 2016
Ascom Myco Installations
Singapore
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Market trends
Ascom’s Healthcare Business grew close to market rates in 2016
However, there is significant opportunity with the growing share of software in our solution mix
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>USD 150
Billion
Global Healthcare IT Spend
7–9%
Total Market Growth Rates
~13%
Global SoftwareMarket Growth Rates
~4%
Global Hardware /Systems Growth Rates
~17%
~2%
Ascom Healthcare Systems & Services Growth Rate
Ascom SoftwareGrowth Rate
Global Benchmarks 2016 Ascom Comparison (organic growth)
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Reminder: Ascom’s Strategic Growth Opportunities
GROWTH
New Solutions
New Markets
New Partners
New Services
AlliancesGlobal Accounts
OEM
Evaluation of additional emerging markets
Transformation ServicesManaged Services
Portfolio IntegrationMore Workflows, Apps, SW
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Current capacity: 200 software developers in 5 countries
500 professional services and support professionals in 15 countries
Budgeted increase in software development resources in 2017
Actively evaluating options for a near shore center inside EU
We bring our significant experiences from our global customer and employee baseto the market in all that we do
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R&D and Software development capacity –Supported by large investments into innovation and professional services
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New solution releases in 2017
Q1 Q2 Q3 Q4
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Ascom Myco 2
teleCARE IP 9.0
Apps for Myco
Clinical apps
Medical Device Drivers
Apps for Myco
Ascom i63 DECT CDAS Core
Telligence 5.0
Unite Integration Platform
Unite Analytics
Digistat v5
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New solution releases in 2017
Q1 Q2 Q3 Q4
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Ascom Myco 2
teleCARE IP 9.0
Apps for Myco
Clinical apps
Medical Device Drivers
Apps for Myco
Ascom i63 DECT CDAS Core
Telligence 5.0
Unite Integration Platform
Unite Analytics
Digistat v5
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New solutions: Ascom Myco 2
Ascom Myco 2 more than a smartphone…
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Clinicaltrials
911
VoWifi
DeviceAlarms
StaffProtection
3rd party apps
ADTSupplies
andStorage
BedMgmt
CodeYellow
EMS
On-callCodeWhite
DeviceAlarms
Unite Context
Patient Monitoring
Nurse call
RTLS
Secure text Patient data
Lab results
TeamassignmentsOther
All trademarks and company names are the property of their respective owner
Unite middleware
Directory& Availability
Mission Critical
Extensions MessagingAlertsTelephonyBarcode scanning
WEADD ROS
SmartConnect
… it delivers the power of the ascomHealthcare Platform - from point of care to anywhere Cleanminder
Vitals
SmartCentral
…with great voice!
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New solutions: Unite ContextFrom Telephone to Communicating within the clinical context
From Messages to Analytics
Secure text messaging + broadcasts Searchable online directory with
availability status Access to patient lists Visibility of patients’ care team Dynamic roles Access to lab results Intuitive registration workflow
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From Alerting to Workflow
From Process Disruption to ProcessOrganization
Ascom is moving ”nurse call“ to the heart of thepoint of care interaction and smart coordination
New solutions: TelligenceClinical workflows in the shape of a ground breaking nurse call solution
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New solutions: Ascom Smart Central Mobile ApplicationDelivering medical device information from the point of care to anywhere
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New partners: GE, Philips, Dräger, EMR, OEM
GE: Continued strong and growing partnership Continued expansion of sales into Growth Markets including joint flagship hospital in Saudi Arabia New partnership on Ascom Digistat applications
Philips: Technology partnership signed with joint business development in progress
Dräger: Technology partnership and commercial contract signed with joint business development in progress
EMR vendors: Active discussions with three leading EMR vendors about cooperation and joint activities
OEM Partners: Active discussions with three current and potentially new OEM partners about expanding the value partnership and joint go to market activities
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New services
Consulting Services• - Workflow analysis• - Technology consulting
Hospital in NetherlandsOrganizational workflow
process design and clinical workflow consulting
Hospital in NorwayWorkflow analysissupporting process
efficiency
Hospital in SwedenCommunication assessment
service in greenfield to improveWiFi network capability
Focus to support customers success in digital transformation Hospital in SingaporeGreenfield workflow analysis
to harvest new build opportunities
Workflow analysisChange
managementWorkflow analysis
System design
Clinical assessment
System delivery
System validation
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Growth Markets 2016
+16%
Major Hospital wins in Singapore, Malaysia and China
Recruitment MD Asia
MEA
+15%
Major installation of remote Tele ICU project together with GE Healthcare delivered in Saudi Arabia and UAE
Asia
+86%
Shanghai: nurse call systems for hospital and elderly care home
China
First wins
Major Russia power plant delivery Recruitment of ECC Sales lead
ROW
+7%
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New markets:Growth markets
2017: Actively strategizing and recruiting for new geographies
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Guidance
Holger Cordes, CEO
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Guidance
2017: Stronger second half-year Accustomed seasonality indicates stronger
H2 also in 2017 H1 will be still impacted by the aftermath of
OneCompany restructuring and ongoing recruiting in sales
H2 will benefit from several new solutions (E.g. Ascom Myco 2, Telligence, Apps, Unite Reporting), increase in effective salesforce and ramping up of new partnership agreements
Guidance 2017 Revenue growth expected at 3–6%
for full year with stronger growth rates for Healthcare
EBITDA margin targeted at 14–15%
Mid-term Guidance 2020 confirmed 7–10% revenue growth in 2020 Ambition to reach an EBITDA margin of
20% in 2020
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(% based on figures at constant currencies)
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2016
Targ
et 2
020
Evolvement of AscomMarket segment mix Revenue mix
75%Healthcare
Offering mix
€
~15%Recurring
~85%Project based
€
~30%Recurring
€
~70%Project based
~25%Support
~17%Software
~58%Systems
23%Support
9%
68%Systems
Regional market mix
63%Healthcare
Industry, retail etc.
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Gross margin improvement from Increasing share of Ascom developed
software Increasing share of software in total revenue Improving margins in consulting, managed
services to balance conservative assumption of margin erosion in HW
Increasing share of software support revenueFunctional cost development Increasing investment in R&D to innovate
and drive growth slightly dilutes EBITDA Cost management in other functional costs
keeps cost expansion underproportionate
% of Net Revenue (based on constant currencies)
2016 * 2020
Software 80% 90%Products, Solutions & Prof. Services 54% 54%Support & Maintenance 34% 45%
Gross Margin 51% 55-57%
Sales & Marketing 24% 20-22%Research & Development (R&D) 9% 11%Administration 5% 4%
EBITDA (pro forma 2016 and guidance 2020) 14% 20%
Bridge to 20% EBITDA margin in 2020 (target model)
*Pro Forma OneCompany (Ascom Group excl. Network Testing and one offs)Target model (not guidance)
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Let’s discuss