Wavecom - wireless solutions for M2M communication
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Transcript of Wavecom - wireless solutions for M2M communication
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Corporate Presentation
Including Q1 2008 Financials
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This presentation may contain forward-looking statements that relate to the Company's plans objectives, estimates and goals. Words such as "expects," "anticipates," "intends," "plans," "believes" and "estimates," and variations of such words and similar expressions identify such forward-looking statements. The Company's business is subject to numerous risks and uncertainties, including probable variability in the Company's quarterly operating results, manufacturing capacity constraints, dependence on a limited number of customers, variability in production yields, dependence on third parties, currency rate changes and risks associated with managing growth. These and other risks and uncertainties, which are described in more detail in the Company's most recent filings with the Securities and Exchange Commission, could cause the Company's actual results and developments to be materially different from those expressed or implied by any of these forward-looking statements.
Forward-looking statements
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Agenda
Smart wireless. Smart business.
Financial highlights Q1 2008
Conclusion
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WAVECOM - Company Profile
A world leader in pre-packaged wireless communications solutions for automotive, industrial (machine-to-machine)and mobile professional applications
Publicly traded on the Euronext and Nasdaq exchanges
Headquartered in Paris with offices in Hong Kong (China), Beijing (China) Research Triangle Park, NC (USA), Farnborough (UK)
~500 total employees 70% focused on R&D
Fabless model with outsourced production
A worldwide network of more than 40 value-added distributors
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Wavecom’s vision…
Vehicles are safer,
Energy consumption is optmimized,
Homes and offices are safe and secure,
Rural communities are connected,
Payments are easier…
To be the driving force in building a fully connected wireless world
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A wide adressable market and a huge potential
« In Europe and the United States alone there are 1.1 billion generic machines, such as computers, photocopiers, burglar alarms and point-of-sales devices that could readilly be connected, yet during 2007, just 2% were »
Telecommunications Predictions, Deloitte, TMT Trends 2008
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How Wavecom adresses its markets
M2MM2MAutomotiveAutomotiveAutomotiveAutomotive Mobile ProfessionalMobile Professional
Tier OneTier OneCar ManufacturerCar Manufacturer
OEMOEM
AftermarketAftermarket
Control & MonitoringControl & Monitoring
Sales & PaymentSales & Payment
Home & SecurityHome & Security
Vehicle RemoteVehicle RemoteManagementManagement
Automatic MeterAutomatic MeterManagementManagement
Fixed VoiceFixed Voice
Mobile ComputingMobile Computing
EntertainmentEntertainment
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Huge markets to addressMarkets Wireless
adoptionTotal available
market (2008)(*)CAGR (2008-
10)
Automotive ~3% 6,3M 29%
Metering ~ 5% 3,0M 20%
Industrial Vehicles ~ 4% 2,9M 36%
Home & Security ~ 5% 2,6M 39%
Control & Monitoring ~ 3% 1,6M 31%
Mobile professionals <1% 3,8M 14%
As the telecommunications sector could be impacted by a possible economic downturn, the growing M2M market demonstrated its viability, catalyzed by the imminent arrival of the 10$ mobile phone.
In Telecommunications Predictions, Deloitte, TMT Trends 2008
(*):Wavecom estimates
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Wavecom has a history of innovation
2004
2006
2003
Open AT®Software SuiteSoftware suite complete with Integrated Development Environment making wireless M2M development easier and faster
First wireless Module Pre-packaged and pre-qualifiedfor handsets and machine applications Focus on intellectual propertyand software development
Pioneer in FleetManagementEarly applications for tracking mobile assets like vehicle fleets
1997199
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WavecomFoundedThe vision: everything could beconnected wirelessly
Wireless
Microprocessor®Breakthrough in high performance processing wireless connectivity on a single component
2000
inSIM®Embedded SIM for automotive and industrial applications
2006
2007
Complete solutionsWavecom Intelligent Device Services combined with Anyware Technologies to offer first complete solution
2008
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Typical Value Chain: Automotive
SiliconSoftware
Wireless CPU®
orModule
System(e.g. car)
Retail Sub-System (e.g. Telematics
Platform)
Wavecom+
Wavecom suppliersWavecom
Wavecom Customer:Telematics
Box
Customer’s Customer:
Volvo (Ford Premier
Auto)
Car Dealership
Sells to consumer
ServiceProvider
Volvo on Call
Wavecom
Wavecom is evolving from a hardware and software company
to a full solution provider
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Unique Technology Ownership/Position …
Wavecom is unique in owning its own technology– Many hundreds of man years of development over the last fourteen years– Field proven in over 30 million devices– Licensed to semiconductor and handset companies
Key Owned Software– Protocol stack, GSM through UMTS/HSDPA– TCP/IP, evolving to IPv6– Real-time operating system– Integrated development environment, powered by Eclipse, C programming
Key Owned Silicon– GSM/GPRS/EDGE baseband– 3G hardwired modem - FPGA available with live calls
NEW: client-server remote device management system– Core engine licensed from a third party who sold to handset business with complete rights to
sublicense, & licensee cannot compete – Customized for Wavecom DOTA and industrial and automotive applications
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The Wavecom approach
The traditional approach is to add wireless modules and software in an existing system…
Wavecom proposes a complete embedded solutions, hardware + software + that can be directly integrated into end products with the add-on of post-installation services.
It is simple and cost effective since the application processing can be done directly on the Wavecom wireless CPU
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Wavecom’s Basic Strategy four key principles
Integrate to remove redundant hardware
Most efficient supply chain
Updating of software remotely – Over-the-Air
Full value-chain solutions (Anyware Technologie)
Integrated Development Environment powered by Eclipse™
Software support – Standard C programming
Superior technical support
Unique technology ownership
Lowest cost of
ownership
Future investment protection
Ease of Use
Sustained leadership
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Wavecom Solutions (Software+Hardware+Server+Subscription)
OpenAT®
Software Suite
Wireless Microprocessor®
Hardware
inSIM®
Embedded SIM
RemoteDevice Mgmt.
Services
Connector
GPS Chipset
InternalGSM antenna
Connector to externalGSM antenna
Connector to externalGPS antenna
CANInterface
GSM/GPRS/EDGE
Wireless Microprocessor®
CustomeCall
ApplicationCAN
aqLink®
GPSOpen AT® RTOS
1. Lowest total cost of ownership
2. Ease of use
3. Investment protection
4. Sustained leadership
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Intelligent Device Services (IDS)
IDS Platform
GGSN -Public/Private APN
IDS Customer
IDS Web PortalHTTPS Access
Application Flow
Device Management: Flow
Device ManagementOperations
(SOAP/XML)
IDS Customer Back office
Utilities Meters
HomeSecurity
VehiculeManagement
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Anyware: a strategic acquisition
A leader in M2M Solutions and Services
Complementary – IDS fits right in, plus global sales channel
A long term partner
Strong client portfolio (CBS Outdoor, EDF, Sogexi and Schneider Electric)
Expected synergies/developments
An accretive acquisition for Wavecom
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Anyware M2M OperatingPortal & IDE
Communication
Device Management
Data Logging
Event Management
Alerting
APIs (web services, Java, SQL)
M2M Middlewar
e
M2M Middlewar
eIDE Based On
EclipseIDE Based On
Eclipse
Access ControlAccess ControlStreet Lighting MonitoringStreet Lighting Monitoring
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Agenda
Smart wireless. Smart business.
Financial highlights Q1 2008
Conclusion
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Revenues and backlog
In millions of euros
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Q4 2007Q1 2007
82.4
Q2 2007
38,145,752,456,148,1
70.9
Q3 2007
52.3 41.7
2007 Revenues: 202.3 million €
Q1 2008
37.5Quarter-end backlogMillions of €
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Sales evolution on an annual basis
Breakdown by regionIn millions of euros
2006 2007EMEA
Americas
APAC
Services and licensing
Products by region
188.8 202.3
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Sales evolution per quarter
Q1 2007 Q4 2007 Q1 2008
60
50
40
30
20
10
EMEA
Americas
APAC
Breakdown by regionIn millions of euros
Products by region
Services/
licences/Anyware
48.1 45.7 38.1
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Gross margin
Q1 2007 Q3 2007 Q4 2007Q2 2007
2007 average: 45.4% (product: 47.3%)(as % of revenues)
Total Gross margin
Product Gross margin
45,6 46,0 46,5
52,851,6
42,7 43,445,3
51,550,7
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35
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45
50
55
Total GrossmarginProductGross margin
Q1 2008
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Results FY 2007 – US GAAP
FY 2006 FY 2007in Millions of euros or % as indicated, In US gaap
Revenues 188.8 202.3
Gross Margin 80.2 91.9
Gross Margin in % of revenues 42.5% 45.4%
R&D expenses 31.1 33.6
Sales and Marketing expenses 16.8 22.7
General and administrative expenses 25.2 22.9
Acquired in-process technology 1.5 Total OPEX 74.6 79.2
Operating income 5.6 12.7
Net income 4.7 17.4
Pro forma Operating income* 12.2 21.1
Cash and marketable securities 54.8 139.3Inventory 6.6 6.1Accounts receivable 28.7 29.5Shareholders' equity 71.7 88.7
* Operating income before stock based compensation and amortization related to acquisitions
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Results Quarters – US GAAP
Q1, 2007 Q4, 2007 Q1, 2008in Millions of euros or % as indicated, In US gaap
Revenues 48.1 45.7 38.1Gross Margin 20.6 23.2 19.6Gross Margin in % of revenues 42.8% 50.8% 51.4%R&D expenses 7.8 9.1 9.7Sales and Marketing expenses 5.4 5.9 7.2General and administrative expenses 5.8 5.9 5.8Acquired in-process technology Total OPEX 19.0 20.9 22.7Operating income 1.6 2.3 -3.1Net income 1.9 7.1 -2.3Pro forma Operating income* 3.4 4.8 2.7Cash and marketable securities 53.7 139.3 127.5Inventory 9.0 6.1 4.9Accounts receivable 32.3 29.5 27.6Shareholders' equity 74.7 88.7 91.4
* Operating income before stock based compensation and amortization related to acquisitions
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2006 2007 Q1 2008
571
440
483
88%
87% 85%
Employees worldwide
Temporary employees and independent contractors
Salaried employees
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Agenda
Smart wireless. Smart business.
FY 2007 highlights
Conclusion
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Wavecom Trends and Objectives
Volumes increasing– Growth more in GSM than CDMA, customers switching globally– ASP of CDMA much higher than GSM
Introduction of new, low cost Wireless Microprocessor® products and subsystems
– Best total cost of ownership for our customers– Ability to significantly reduce price and maintain margins
More contact with end-customers and service providers
Acquisitions of key strategic targets to continue, but focus will be on smaller deals
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Wavecom’s acquisition strategy
External growth:– Transformational - Sony Ericsson M2M business– Technology-specific – Anyware Technologies
Acquisitions to continue – targeting companies that will give us specific technologies that enhance our product and/or service offer
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2008 Business initiatives
Redeploying ressources to applications engineering to support design wins
Re-energize EMEA sales team and distributors
Expand customer and revenue base with Anyware model – software, services, system
Profitable growth
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Total numberof outstanding shares:15 796 591 – Float : 58%
Dual listed– Euronext Compartment B,
Isin code FR0000073066 – Nasdaq: wvcm (ticker)
Financial calendar: July 23, 2008 Q2/H1 2008 results
Capital structure58%
22%
6%6%
Treasury
Float
Founders
3%
Sloane Robinson (UK)
Jo Hambro (UK)
5%
Lansdowne Partners (UK)
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3, esplanade du Foncet - 92442 Issy-les-Moulineaux Cedex - France
Tel: +33 (0)1 46 29 08 00 - Fax: +33 (0)1 46 29 08 08
_______________________________________________
430 Davis Dr., Suite 300
P.O. Box 13920 - Research Triangle Park, North Carolina USA
Tel: +1 919 237 4000 Fax: =1 919 237 4140
_______________________________________________
Unit 201 – 207, Second Floor, Bio-Informatics Centre
No. 2 Science Park West Avenue
Hong Kong Science Park, Shatin - New Territories, Hong Kong
Tel: +852 2824 5225 - Fax: +852 2824 5488
WAVECOM S.A.
WAVECOM, Inc.
WAVECOM Asia Pacific