DMX Technologies Corporate Update - listed...
Transcript of DMX Technologies Corporate Update - listed...
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Presentation Outline
DMX Business Segments
Business Realignment
Business Milestones
Financial Track Records
Digital Media
Infrastructure Enabling
Summary
Growth Strategy
Conclusion
Rights Issue
Use of Funds
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Business Realignment: To Address Changing
Technological and Market Demands
In 2007, the Group realigned into two core businesses – the first intraditional Infrastructure Enabling and the second being Digital Media.
Infrastructure Enabling group comprises Infrastructure Solutions andManaged Services
Digital Media group comprises Digital Media solutions, MultimediaSoftware and New Media Content
Move was undertaken to update DMX!s successful traditional businessmodel in systems integration as well as to ensure DMX!s continuingrelevance to changing technological markets.
Business realignment equips DMX to leverage on growingopportunities in security, digital media market in China thuscreating long term value for customers and shareholders.
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CATV
Telco
Broadcasters
MobilePortal
Digital
MediaMulti Media
Software
Groups Segments/Solutions
Customers
Digital MediaSolution
New Media
Content
Telco
Enterprises
Mobile
InfrastructureEnabling
InfrastructureSolution
Managed Services
DMX Business Segments
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Business Milestones to-date 2008
Launch of Managed Service division; Vantage
Vantage secures MSSP deal with leading Chinese logistics player, Anji-TNT
Wins milestone Digital Media deal to develop world’s first IPTV entertainmentsystem for Keppel FELS
Implements first-ever “smartcard-less” Digitisation of Tai’An CATV in PRC
3 major CATV provincial wins - Inner Mongolia, Shaanxi and Hubei provinces
Forging strong strategic technological alliances:
Enhances Digital Media solution to create a non-stop fault tolerant IPTV solutionthrough strategic alliance with Stratus Technologies
Steps up Infrastructure Enabling capability by partnering with Silicon Valley-basedA10 Networks
Vantage enhances Managed Service capabilities with strategic partnership;
becomes Qualys certified reseller
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51.7
77.473.8
86.9
77.5
84.0
77.8
10
30
50
70
90
1H05 2H05 1H06 2H06 1H07 2H07 1H08
US$ Millions
1H08 Financial Highlights - Revenue
2H07 Revenue :
Reduced
infrastructure
business in Korea
and China
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33.842.0
71.0
129.2
160.7 161.6
77.8
10
30
50
70
90
110
130
150
170
FY02 FY03 FY04 FY05 FY06 FY07 FY08 H1
US$ Millions
02-07 CAGR 30%02-07 CAGR 30%
Financial Track Records: Total Revenue
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6.3
8.7 8.59.3
6.3
3.03.3
0
2
4
6
8
10
12
14
16
18
20
1H05 2H05 1H06 2H06 1H07 2H07 1H08
US$ Millions
1H08 Financial Highlights - Profits After Tax
1H08 Lower PAT:
US$2.7m increasein non operatingexpense ofamortisationand depreciation
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3.9
5.2
8.9
15.1
17.8
9.3
3.3
0
2
4
6
8
10
12
14
16
18
20
FY02 FY03 FY04 FY05 FY06 FY07 FY08 H1
US$ Millions
02-07 CAGR 16%02-07 CAGR 16%
Financial Track Records: Net Profit after Tax
Lower NPAT in FY07caused by: -
1) Expansion plan inKorea notyielding desiredresults.
2) Additionalinvestments inmarketing andengineeringresources inDigital Media andMulti-MediaSoftware
CAGR before FY07 =36%
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Financial Track Records: Contribution % by
Geography
0
20
40
60
80
100%
China 83 65 75 73 71
Non-China 17 35 25 27 29
FY04 FY05 FY06 FY07 1H FY08
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Financial Track Records: Contribution % by Business
Segment
0%
20%
40%
60%
80%
100%
Managed Services 4 4 3 5
Infrastructure Solutions 84 80 75 65
Multi-Media Software 1 2 5 7
Digital Media Solution 11 14 17 22
FY05 FY06 FY07 1H FY08
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Financial Track Records : Balance sheet
177.5172.9164.9101.6Nett Assets (US$ Million)
0.2720.2630.2660.179Nett Tangible Assets Per share(US cents)
0.3850.3750.3580.269Nett Assets Per share (US cents)
1H FY08FY 07FY 06FY 05
Strong Assets Backing
Low Debt Gearing Ratio
6.4%10.4%5.2%5.2%Debt to Equity
1H FY08FY 07FY 06FY 05
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Digital Media Solution
Integrated solution provided to
broadcasters, cable and telecom
operators to enable:
! Digital CATV Services
! IPTV Services
Headend CA Video Server
STB
Mid
dle
wa
re
Co
nte
nt
Ma
na
ge
me
nt
Se
rvic
e F
ulfill
me
nt
&
Assu
ran
ce
Dig
ita
l M
ed
ia O
SS
Back office Middleware
Network Resource ManagementBEE MediaSoft Ltd
CableGuard
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Multi-Media Software - BEE!s Product Suite
TV Middleware
Content
Management
Operation Support
Service Fulfillment
& Assurance
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Approach to CATV market
IntegratedService
Management
Value AddedServices
Service Portfolio
Multi-stage digitization processMulti-stage digitization process
TV Middleware and
Back office
(Vision TV)
DigitalBroadcasting
• Add!l Service• Add!l Content• Add!l Mgt
Value AddedBusiness
• ISP• DVB-H• TVoD• …
• AdvertisementManagement
• Interactive TV• Databroadcasting
Stable Service Support Infrastructure
Serv
ice
Covera
ge
Cable Guard
& Network
Resource
Management
(NRM)
Customer Care &
Billing (MOSS)
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Vision TV – Enriched End User Experience
Enhanced TV Experience:
TV on demand, VOD, EPGStay Connected:
Information on Demand
End User Experience: Interactivity
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Multi-Media Software - Competitive Advantage
True OPEN platform
Standard based technologies
Best of Breed approach
“Local” implementation capabilities
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World’s most advance customer reference
A combination of professional Project Management
and Technologies
Our Digital Media business
World’s largest operators (by subscribers)
World’s first off-shore IPTV entertainment system
Asia’s first and largest smart-cardless CA
deployment
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New Media Content
Creating a 360° value chain of content offeringacross CATV, Mobile and Internet platforms
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CATV market in China - VOD Growth
Riding on the back China!s digitisation is demand for new interactiveservices on CATV
Consumers seek more choice and more convenience hence demand forservices like VOD.
The VOD service will offer a major opportunity to deliver much morecontent than traditional broadcast schedules.
In strategic discussions with all major studios to aggregate andredistribute content through it!s CATV partners that are launching VODservices.
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Infrastructure Solution
Infrastructure Solution
Information
Security SolutionNetwork
Integration
Telecom Operators
Enterprise
Broadband Services
Secured Online Business
Triple Play Services
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Challenges in Infrastructure Solutions Market
Our traditional Infrastructure market has entered intoa mature phase - such as Korea, Hong Kong,Singapore.
Increasing competitive broadband market in China.
" Growth rate slowing to mid-teens.
" China Telcos looking at 3G as next step forward.
" Greater competition from Chinese manufacturers.
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Opportunities in Infrastructure Solutions Market
Increasing requirements for security solutions.
" Market in APEJ was US$2.9 billion in 2006.
" Forecast 15% per annum growth till 2011; reaching US$5.8billion.
Value added services and application driven to increaseARPU and retain customers.
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Steps taken in Infrastructure Solutions Market
Streamlined Korea operations" Staff and cost reduction
" Establishing market position in security solutions
Enhance focus on security solutions" Replicate successes within China
Complement Infrastructure Solutions withManaged Services" Established Managed Services Centre
" Work with Telecom operators to provide VAS to their end-users
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Managed Services
Managed Security Services
! Proactive security devicesmanagement & monitoring
! Security devices performancemanagement & monitoring
! Security policy management! Security Incident handling! Security Scanning! Security Analysis! Review & reporting
Management Services
! Network maintenance &support
! Network performancemanagement
! Network Optimization
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Opportunities - Managed Services
Drivers for Managed Security Services (MSS)
- Nature, volume and variety of threats on cyberspace
- Concerns over protection of data
- Legal liabilities and compliance with governmental
regulations
- Shortage of skilled security professionals
IDC forecasts MSS market to grow at CAGR of 17.4%
over five years to US$1 billion by 2012.
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Growth Strategy
Expanding focus on high growth areas; digital CATV,security solutions and services while continuing thestronghold in Infrastructure Solutions
Creating robust recurring revenue through competitivesoftware and services
Leverage on technology alliances with vendors towiden business and geographical coverage
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Robust Revenue Model
Recurring,
Scalable
Business
Model
1. P
roje
ct
2. Recurring
3. Upgrades
1. Projects
Traditional IT System Integration
Expansion
2. Recurring Revenues
Software Licensing
Subscriber Based Fees
Management Services
Managed Security Services
3. Upgrades
Back Office System Enhancement
Software Upgrades andmaintenance
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Growth in multi-dimensions …
Customer
Equipment Vendors
Distributors
DMX Integration
Total Solution & Services Provider
Customer
TechnologyProvisioning
TechnologyAlliance
Coverage
Custo
mer
Penetr
ation
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Cash Flows Summary
Investments: Acquisitions -a) Lotun (FY04) – China Mobile and enterprise customersb) Packet Systems Group (FY05) – Geographical expansion
Capital Expenditure: Software Development -a) transform business model - project based to recurring basedb) tap on new business opportunities
US$M 1H08 1H07 FY07 FY06 FY05
Beginning Balance 40.0 45.6
45.6 23.8 32.9
Operating activities (0.8) (12.8) 9.4 (1.3) 3.1
Capex/Investments (7.1) (8.6) (22.1) (25.6) (14.7)
Financing activities (6.5) 5.6 6.2 47.4 2.4
Closing 26.4 30.1 40.0 45.6 23.8
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Transaction Overview: Funding Requirements
Uses Investment Commentary
Development of DigitalMedia Group S$ 15mm
Digital media plays an important role in the transforming ofthe revenue model over the next 1-2 years.Continuous development of software to stay ahead andexpansion of the business to take advantage of currentopportunities.
Extend participation in digital media market. Tap onoperators to reach their consumers through end to endsolution and services offerings. Seek partners with expertisein content and advertising space.
Acquisition / JointVentures
S$ 15mm
S$ balanceWorking Capital
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In Conclusion
Our business realignment is showing results –
Our Digital Media group is increasing momentum since late 2007to date with prominent customer wins, entry into new mediacontent, and strategic alliances
Our Managed Service business is also taking off with strategicalliances and prominent customer wins
The funds raised in the Rights Issue will accelerate the growthand maximise the opportunities for Digital Media