oozi cats, ceo yosi fait, fd & president · 2017-09-15 · oozi cats, ceo yosi fait, fd &...
Post on 20-May-2020
2 Views
Preview:
TRANSCRIPT
SLID
E1
Investor Briefing Oozi Cats, CEO
Yosi Fait, FD & President
August, 2017
SLID
E2
This document and the accompanying oral presentation has been prepared by Telit Communications PLC (the "Company").Cannacord Genuity Limited which is authorized andregulated by the Financial Services Authority, is acting as the nominated adviser and broker to the Company.
The information contained in the presentation has not been verified by Cannacord Genuity Limited nor does this presentation purport to be all-inclusive or to contain all theinformation that an investor may desire to have in evaluating whether or not to make an investment in the Company. The information has not been independently verified and issubject to material updating, revision and further amendment.
This document has not been approved by an authorized person as is required by Section 21 of the Financial Services and Markets Act 2000 ("FSMA") and therefore it will only bedistributed in accordance with an exemption to Section 21 of the FSMA. This document (including its contents) is confidential and is for distribution in the United Kingdom only topersons who are authorized persons or exempted persons within the meaning of FSMA or any Order made thereunder, or to persons of a kind described in Articles 19 or 49 or 50of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (as amended) and, if permitted by applicable law, for distribution outside the United Kingdom toprofessionals or institutions whose ordinary business involves them in engaging in investment activities or who are otherwise permitted to receive it in accordance with the laws ofthe relevant jurisdiction. It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. This document is being supplied to you solely for yourinformation and may not be copied, reproduced, further distributed to any other person or published, in whole or in part, for any purpose. Any other person who receives thisdocument should not rely or act upon it. By accepting this document the recipient represents and warrants that they are a person who falls within the above description of personsentitled to receive this document. The information contained in this document is confidential and the property of the Company. The information in this document and in thepresentation does not constitute, or form part of, any offer to sell or issue, or any solicitation of an offer to purchase or subscribe for any shares in the Company nor shall thisdocument, or any part of it, or the fact of its distribution, form the basis of, or be relied on, in connection with any contract. No reliance may be placed for any purpose whatsoeveron the information contained in this document or on the completeness, accuracy or fairness thereof. No representation or warranty, express or implied, is made or given by or onbehalf of the Company or its Directors or Cannacord Genuity Limited or any other person as to the accuracy, completeness or fairness of the information or opinions contained inthis document and in the presentation and no responsibility or liability is accepted to places for any such information or opinions. Notwithstanding this, nothing in this paragraphshall exclude liability for any such representation or warranty made fraudulently. Cannacord Genuity Limited is acting solely for the Company as nominated adviser and brokerand is not acting for any other person and will not regard any other person (whether or not a recipient of this document) as its client and will not be responsible for providing theprotections afforded to clients of Cannacord Genuity Limited to any other person or for providing advice to any other person. The distribution of this document in certainjurisdictions may be restricted by law and therefore persons into whose possession this document comes should inform themselves about and observe any such restrictions. Anysuch distribution could result in a violation of the law of such jurisdictions. Neither this document nor any copy of it may be taken or transmitted into Canada, Japan and SouthAfrica or distributed to Canada, Japan or South Africa or to any national, citizen or resident thereof or any corporation, partnership or other entity created or organized under thelaws thereof.
The Company's shares have not been and will not be registered under the US Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold within theUnited States except in transactions exempt from or not subject to the registration requirements of the Securities Act.
Disclaimer
SLID
E3
Financial Highlights
IoT KNOW- HOW
H1 2017 IoT Services Revenues $17.2M (25.5% increase)
H1 2017 Revenues: $177.6M (6.9% increase)
2016 Revenues: $370.3M (11% increase)
$49.7M net raised following a placing of new shares
Guidance for the full trading year 2017*:
Revenues: $400M - $430M (8%-16.1% increase)
Adjusted EBITDA: $47M - $60M
* Guidance for the full year reflects current business indicators and expectations. Inherent in this guidance are risk factors that are described in greater detail in our regulatory filings.
All figures are approximations, based on management's current beliefs and assumptions and our actual results could differ from those presented above and elsewhere in this presentation.
SLID
E4
IoT KNOW- HOW
Operational Highlights
deviceWISE asset gateway software deployed into Cisco IoT gateways
New partnerships with OT- Morpho and Tele2
First Purchase order from emerging North America car OEM
Acquisition of GainSpan Corporation ultra-low power Wi-Fi
Continues success in gaining end-to-end IoT solutions customers,
such as Polaris, Zucchetti, as well as many others
SLID
E5
Telit- Global footprint
4Company Owned
Protocol Stacks
7000Customers Worldwide
15Years Experience in IoT
+4500Total Man-Years of
Research & Development
10Major Acquisitions
in 6 Years
21Language Spoken
among our Employees
1080Employees Worldwide
+400Product Certifications
Worldwide
ISO/TS16949Compliant for Manufacturing, R&D and
Support Functions Worldwide
182Module Types
27Nationalities Among
our Employees
10Top 10 customers comprise
only 32.5% of the revenues
Top
11R&D centers with over 500
engineers
36sales offices & 78 exclusive
distributors, covering 80
countries around the globe
350including distributors
Sales force of about
5Outsourced EMSs
SLID
E6
TELIT IoT PRODUCTS TELIT IoT SERVICES
Enabling the Internet of Things
Products and Services for end-to-end IoT solutions
IoTMODULES
IoTCONNECTIVITY
Apps Enterprise SystemsThings
IoTPLATFORMS
TELIT CONSULTING
IoTKNOW- HOW
SLID
E7
SLID
E7
** Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortization, share based payments and non recurring expenses.
Continuous Growth & Profitability
Revenue (Million USD)
177.0
207.4
243.5
294
333.5
370.3
H1:166.1
H1:177.6
150
200
250
300
350
400
2011 2012 2013 2014 2015 2016 2017
Gross Margin %
37.07
38.2
39.5539.9
40.66
H1:40.1
H1:39.2
34
36
38
40
42
44
2012 2013 2014 2015 2016 2017
13.1
17.3
26.9
34.7
45.3
54.4
H1:21.4
H1:14.7
10
15
20
25
30
35
40
45
50
55
60
2011 2012 2013 2014 2015 2016 2017
Adjusted EBITDA** (Million USD) Gross Profit (Million USD)
67.8
76.9
92.5
116.3
133.1
150.6
H1:69.6
H1: 66.6
40.0
60.0
80.0
100.0
120.0
140.0
160.0
2011 2012 2013 2014 2015 2016 2017
SLID
E8
SLID
E8
Revenues and Operating profit (Loss)
IoT Services IoT Products
• H1 2017 revenues increased by 6.9% over H1
2016.
• Revenues from Telit’s IoT Services increased
by 25.5% over H1 2016.
• IoT Products, operating profit $12.6 million
(7.9% as a percentage of revenues). Due to a
lower than expected revenue growth, slight
decrease in the gross margin and the
acquisition of GainSpan integration.
• IoT Services, which is the future growth
engine, recorded an operating loss of $6.7M in
H1 2017 (H1 2016: $6.9M) due to continued
heavy investments.
Comments
274307.5
335.2
145.2 152.4 160.4
20
26
35.1
11.113.7
17.2
0
20
40
60
80
100
120
140
160
180
200
220
240
260
280
300
320
340
360
380
400
2014 2015 2016 H1 2015 H1 2016 H1 2017
333.5
294
177.6
49.4
55.4
-8.2 -10.2
IoT Services Operating lossIoT Products Operating profit
24.1
12.6
-6.9 -6.7
166.1156.3
370.3
SLID
E9
SLID
E9
Revenues by Regions
(Million USD)
136.5 129.4149
64.8 67.3 76.846.4% 38.8%
40.2%
41.5%
116.9 133.2
137.3
58.5 6368.2
39.8% 40.0%
37.1%
37.4%
40.670.9
84
3335.8
32.6
13.8%21.2%
22.7%
21.1%
0
20
40
60
80
100
120
140
160
180
200
220
240
260
280
300
320
340
360
380
400
2014 2015 2016 H1 2015 H1 2016 H1 2017
294
333.5
370.3
166.1177.6
• Americas revenue increased by 14.1% mainly from
ramping up of different programs based on the LTE Cat-1
modules. Telit saw an increasing demand for the new
technologies including Cat-1 and Cat-1 VoLTE. A delay in
obtaining U.S. carrier certifications of LTE CAT-1 VoLTE
(Voice over LTE) chipsets by a blue-chip supplier was the
main factor in the Group’s reduced revenue growth in the
region. The upcoming certifications by leading U.S.
carriers of CAT-1 VoLTE chipsets of a blue-chip supplier
are expected to boost revenues during the second half of
the year and in 2018.
• EMEA revenues increased by 8.3% in this mature market
underlines the Group’s strong presence in the region. The
prevailing technology is still 2G and the expected shift in
technologies from 2G to LTE (both high and low
categories), in the mid to long-term, will boost the growth
in the region.
• During the last three years, we tripled our revenues to $84
million in 2016. During the first half, Telit experienced
some delays in key programs that shifted the ramp-up
towards the second half of year, affecting revenues in H1.
The region is expected to return to double digit revenue
growth in 2018.
Americas APACEMEA
Comments
156.3
40.5%
37.9%
21.6%
43.2%
38.4%
18.4%
SLID
E10
SLID
E10
(million USD)
Gross profit / Gross margin
• Gross margin was negatively affected mainly by the
delay in certifications of CAT-1 VoLTE, which led the
Group to sell certain customers higher cost LTE Cat-3
VoLTE products, at the same selling price as CAT-1
VoLTE products. Gross margin was also impacted by
the shift away from 2G and CDMA, both mature
technologies with high gross margins, to LTE products,
which is a relatively new technology with lower margins
at this stage. LTE products margins are forecasted to
improve through the maturity and growth in volumes, as
this is the normal trend were Gross Margin is higher in
aged customers and products design.
• Gross profit generated by the IoT Products business
unit was $59.2 million, reflecting a gross margin of
36.9% (H1 2016: $57.4 million; 37.7%), while gross
profit generated by the IoT Services business unit was
$10.4 million, reflecting a gross margin of 60.4% (H1
2016: $9.2 million; 67.2%).
Gross profit Gross margin
Comments
116.3133.1
150.6
62.0 66.6 69.6
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
160
2014 2015 2016 H1 2015 H1 2016 H1 2017
39.55%39.90%
40.66%
39.7%
40.1%
39.2%
30%
35%
40%
45%
SLID
E11
SLID
E11
(million USD)
Gross Research & Development expenses*
* Gross Research & Development expenses are defined as research & development expenses before capitalized development expenses and before amortization of internally
generated development assets.
Research and development, net $25.5M
Add - Capitalization $17.9M
Less - Amortization ($8M)
Gross research & development expenses $35.4M
48.8 51.257.4
24.428.8
35.4
0
10
20
30
40
50
60
70
2014 2015 2016 H1 2015 H1 2016 H1 2017
16.6%
15.4% 15.5%
• The growth in expenditure is mainly due to the
acquisition of Stollmann in H1 2016 and GainSpan in
H1 2017 and the acceleration in the 4G developments
and new automotive projects.
• H1 2017 expenses represented 19.9% of revenues
(H1 2016: 17.3%). We expect gross R&D operating
expenses as a percentage of revenues, to decline
during H2, and continue to decline in 2018.
• Gross research & development expenses breakdown:
Comments
R&D % of revenue
15.6%17.3%
19.9%
0%
10%
20%
5%
15%
SLID
E12
SLID
E12
30 June 2017: $83.7 million31 December 2016: $69.8 million
Internally generated development assets, net
$41.8M(60%)
$28M
(40%)
Net assets in Amortization phase Net assets in development phase
• Internally generated development assets, net as of
30 June 2017 increased during the period by $13.9
million to $83.7 million.
• Internally generated development assets that
completed the development phase, moved to mass
production phase and started the 3 to 5 years
period of amortization remained flat with 59% of the
total assets (31 December 2016: 60%).
Comments
$49M
(59%)
$34.7M
(41%)
SLID
E13
SLID
E13
CommentsInternally generated development assets
(million USD)
• The amount capitalized in respect of internally
generated development costs in H1 2017 is
$17.9 million.
• This figure is mainly related to the development
of the smart Wi-Fi (GainSpan acquisition), 4G
product lines for high and low categories
including the Cat-M1 and NB-IoT; the
automotive products; and the IoT Services.
• The amortisation of internally generated
development costs increased by 80.7% to $8.0
million (H1 2016: $4.4 million). This increase
relates mainly to the release of 3G and 4G
products to the market during the course of
2015, 2016 and H1 2017. 59% of the
Capitalised assets are now being amortised (H1
2016: 48%).
9%
24%
14% 9%11%
12%
18%
13%
9%7%
22.1
6.79.4
7.24.8 4.1
36.4
6.9 6.5
11.1
62.9
46.6
7.4 6.2
12.8
8.42.3
0
5
10
15
20
25
30
35
40
45
50
4G 3.5G 3G IoT Service GNSS & SR Other IoT Modules
52%
9%12% 10% 7%17%
9%
15%16%
56%
41%
13%10%
9% 9% 3%8% 4%
2015 H1 20172016
SLID
E14
SLID
E14
(million USD)
Selling & Marketing
• Selling and Marketing increased by $5.2 million
to $35.1 million (H1 2016: $29.9 million), and
represented 19.8% of revenues (H1 2016:
18.0%). The increase is mainly due to the
acquisitions of Stollmann in H1 2016 and
GainSpan in H1 2017 and the investment in
catering to the markets served by these
businesses - Smart Bluetooth and Smart Wi-Fi.
• We expect selling and marketing expenses as a
percentage of revenues, to decline during H2,
and continue to decline in 2018.50.4
55.5
63.8
26.429.9
35.1
0
10
20
30
40
50
60
70
2014 2015 2016 H1 2015 H1 2016 H1 2017
17.1%16.6%
17.2%
Selling & Marketing % of revenue
Comments
16.9%18.0%
19.8%
0%
10%
20%
5%
15%
SLID
E15
SLID
E15
(million USD)
General & Administrative
• General and Administrative expenses
increased by $1.4 million to $14.4 million (H1
2016: $13.0 million), and represented 8.1%
of revenues (H1 2016: 7.8%). This increase
reflects the continued expansion of the
Group activities.
• We expect General and Administrative
expenses as a percentage of revenues, to
decline during H2, and continue to decline in
2018.
26.5 26.6
30
12.1 1314.4
0
5
10
15
20
25
30
35
2014 2015 2016 H1 2015 H1 2016 H1 2017
9.0%8.0%
8.1%
Comments
General & Administrative % of revenue
7.8% 7.8%
8.1%
0%
10%
20%
5%
15%
SLID
E16
SLID
E16
(million USD)
Adjusted EBIT
(million USD)
Adjusted EBITDA
24.7
30.634.2
15.713.1
1.6
0
5
10
15
20
25
30
35
40
2014 2015 2016 H1 2015 H1 2016 H1 2017
34.6
45.3
54.4
21.8 21.414.7
0
10
20
30
40
50
60
2014 2015 2016 H1 2015 H1 2016 H1 2017
11.8%
13.6%14.7%
Adjusted EBITDA % of revenue Adjusted EBIT % of revenue
8.4%
9.2% 9.2%
13.9% 12.9%8.3%
0%
5%
15%
10%
10.0%
7.9%
0.9%
0%
15%
10%
5%
SLID
E17
SLID
E17
(million USD)(cent USD)
Adjusted PBT Adjusted basic EPS
23.427.7
32.8
13.911.4
-0.3
-5
0
5
10
15
20
25
30
35
2014 2015 2016 H1 2015 H1 2016 H1 2017
8.0% 8.3%8.9%
Adjusted PBT % of revenue
18.421.7
26.4
11.7 10.0
-0.8
-5
0
5
10
15
20
25
30
2014 2015 2016 H1 2015 H1 2016 H1 20170%
5%
10%
15%
8.9%
6.9%
0.2%
SLID
E18
SLID
E18
($ Million)
Net (Debt) /Cash
($ Million)
34.1
44.351.5
21.6 21.214
0
10
20
30
40
50
60
2014 2015 2016 H1 2015 H1 2016 H1 2017
3.9 1.1
17.7
0
29.1
9.3
-35
-30
-25
-20
-15
-10
-5
0
5
31.12.2014 31.12.2015 30.6.201631.12.2016
Operating cash flows before movements in working capital
30.6.201730.6.2015
SLID
E19
SLID
E19
Statement of Financial Position
Balance Sheet
30.6.17 31.12.16 30.6.16
In $'000
Non-current assets 162,292 135,737 133,252
Current assets 188,868 174,889 135,542
Total assets 351,160 310,626 268,794
shareholders'
equity169,902 120,380 112,561
Non-current
liabilities25,901 32,931 32,928
Current liabilities 155,357 157,315 123,305
Total passive 351,160 310,626 268,794
Net (debt) /cash (9,268) (17,685) (29,115)
• Increase of $26.6M in non-current assets in H1 2017,
related mainly to intangible assets from acquisitions and
increase in R&D assets.
• The change in net debt from 31 December 2016 is due
mainly to $49.7 million raised by the Group by issue of
shares, offset by the first half loss; $8 million used for an
acquisition $6.5 million invested in CAPEX; payment of
$5.7 million as final dividend for the 2016 financial year,
and an increase in working capital, mainly in inventory.
• The company issued 11,593,000 ordinary shares for a net
value of $49.7 million, and paid $5.7 million in cash as final
dividend for 2016 financial year.
Comments
SLID
E20
SLID
E20
Statement of Cash Flows
Cash Flows
Jan-June Full Year Jan-June
2017 2016 2016
In $'000
Net cash generated (used in) from operating activities (3,292) 47,651 8,512
Net cash used in investing activities (36,184) (56,933) (31,708)
Net cash generated from financing activities (42,129) 8,247 11,871
Net (decrease)/increase in cash and cash equivalents 2,652 (1,035) (11,325)
Cash and cash equivalents at beginning of period 26,547 29,844 29,844
Effect of exchange rate differences 527 (2,262) 660
Cash and cash equivalents at end of period 29,726 26,547 19,179
• Investment activities includes cash used for acquisitions for about
$6.7M.
• Net cash from financing activities includes $49.7M raised by issue
of new shares, net of $5.7M payment of 2016 final dividend.
Comments
SLID
E21
We are the only Gap- free offering of IoT end to end solution,
hardware-connectivity-platform and know how
SLID
E21
Leveraging the digitization revolution that
includes massive IoT deployments across
industries and in factories we are building
the biggest PaaS (Platform as a Service) in the
world.
top related