itouch plc preliminary results 2001 - investis...
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iTouch plc
iTouch plc
Preliminary Results 2001
iTouch plc
2
• Wireless ASP
• Mobile services for both consumer and business customers
• Listed on London Stock Exchange in August 2000 (raised £42.5m net)
• Operating in 6 countries and a further 2 with MIH
• Agreements with 20 mobile operators and over 100 media companiesworldwide
iTouch plc
iTouch plc
John Miller
Acting Chief Financial Officer
Financial Review
3
iTouch plc
113%£36k£17kRevenue per employee
£36.1m
3.6m
4.7m
733
£15.0m
£48.2m
0.8m
1.6m
238
£4.2m
355% (1)Voice minutes Q4 (2)
Cash at 31 December
201% (1)SMS messages Q4 (2)
209% (1)Corporate Data customers Q4 (2)
260%Revenue
4
Highlights 2000 2001 % Change
(1) Q4 2000 vs Q4 2001
(2) Average monthly
iTouch plc
5
Profit and Loss
1.4p
0.9p
(3.9)
0.0
(3.9)
0.4
(4.3)
(0.0)
(4.3)
(0.1)
(0.1)
(1.2)
(0.3)
(2.6)
(4.5)
(0.8)
2.6
(2.4)
5.0
Q4 2001 £m
(0.8)--Exceptional charge
(5.0)(4.7)(3.9)EBIT
1.6p
0.7p
(4.5)
0.1
(4.6)
0.4
(4.2)
(0.1)
(0.0)
(1.3)
(0.2)
(2.6)
(4.1)
(0.8)
2.3
(1.7)
4.0
Q3 2001 £m
1.1p
0.5p
(3.2)
0.1
(3.3)
0.7
(3.9)
(0.1)
(0.2)
(1.4)
(0.1)
(2.0)
(2.9)
(0.5)
1.4
(1.2)
2.6
Q1 2001 £m
1.8Gross profit
(3.9)General admin costs
1.5p
0.9p
(4.2)
0.1
(4.3)
0.4
(4.7)
(0.1)
(0.2)
(1.4)
(0.1)
(2.9)
(0.8)
(1.6)
3.4
Q2 2001 £m
LPS
- basic
- adjusted
Retained loss
Minorities
LBT
Interest
EBIT before exceptional
Associates/JV
Share incentive scheme
Depreciation
Goodwill amortisation
EBITDA
Selling costs
COGS
Actual revenue
5
iTouch plc
Profit and Loss
6.8p
3.5p
(14.8)
0.5
(15.3)
1.5
(16.8)
-
(16.8)
(0.4)
(0.5)
(1.8)
(4.8)
(0.3)
(9.1)
(9.8)
(1.9)
2.6
(1.6)
4.2
From 18/01 2000 £m
(0.8)Exceptional charge
(18.0)EBIT
5.6p
3.0p
(15.9)
0.2
(16.1)
1.9
(17.2)
(0.5)
-
(0.5)
(5.4)
(0.7)
(10.1)
(15.3)
(2.9)
8.1
(6.9)
15.0
12 months 2001 £m
Gross profit
General admin costs
LPS
- basic
- adjusted
Retained loss
Minorities
LBT
Interest
EBIT before exceptional
Associates/JV
Development expenditure
Share incentive scheme
Depreciation
Goodwill amortisation
Loss before amortisation, depreciation exceptional and share scheme charges
Selling costs
COGS
Actual revenue
6
iTouch plc
(2.6)
(3.9)
54%
2.6
5.0
Q4
(2.6)
(4.6)
57%
2.3
4.0
Q3
(2.9)
(4.3)
54%
1.8
3.4
Q2
(2.0)
(3.3)
52%
1.4
2.6
Q1
20012000
64%62%51%61%Gross margin
(3.6)
(5.4)
1.2
1.9
Q4
(3.6)
(6.8)
(1.4)
(2.2)
(0.5)
(0.9)
EBITDA
LBT
0.80.40.1Gross profit
1.20.80.2Revenue
Q3Q2Q1£m
* Q1 proforma v Q2
• Quarterly revenue growth +56%* +51% +55% +36% +29% +20% +24%
7
Quarterly Profit and Loss
iTouch plc
8
2000
Ireland48%
UK9%
South Africa38%
Australasia 5%
Revenue by Country
2001
Ireland21%
Australasia25%
South Africa19%
UK35%
iTouch plc
+52%
+77%
(1%)
+137%
9,060
2,491
3,037
3,531
2001
H2
5,970
1,404
3,075
1,491
2001
H1
+260%15,0304,172Total
+236%3,8951,160Other
+495%6,1121,028SMS
+153%5,0221,984Voice
20012000£k
9
Revenue by Product
iTouch plc
52
4,636
2,470
H2 2001 Average
37 *47 **-CustomersBusiness Mobility
3,009
891
H1 2001 Average
3,832
1,687
2001 Average
937Messages (k)SMS
775Minutes (k)Voice
2000 Average
10
NFOD
* Data is for Q2 – no data available for Q1
** Average is for 9 months ended 31 December 2001
iTouch plc
Wayne Pitout
Joint Managing Director
Operational Review
11
iTouch plc
iTOUCH PLC
IPO Research Model 2000 Actual 2000 IPO Research Model 2001 Actual 2001(£'000) (£'000) (£'000) (£'000)
Revenue £3,200 £4,172 £14,600 £15,030
Gross Margin -£500 £2,530 £8,000 £8,132
EBITDA -£19,400 -£9,145 -£21,200 -£10,139
Capex £8,000 £1,717 £8,100 £936
Marketing £7,500 £1,816 £15,200 £2,894
Net Cash/(Debt) £50,800 £48,185 £21,600 £36,056
(IPO Source : Merrill Lynch 22 June 2000)
Actual vs IPO Research Model
12
iTouch plc
13
Successful Strategy Implementation 2001
• Significant market positions secured in each operation, aided by key acquisitions
• Extensive operator and media partnerships
• GAP (Global Architecture Platform) being deployed in all OpCo’s
• Low cost and low risk entry into Thailand and Indonesia with MIH
iTouch plc
14
Acquisition & Licensing Strategy
• Critical mass for existing OpCo’s – revenues, relationships and resources
• New territories to widen distribution network
• Product enhancing (Group)
MIH
Worldpop (UK)
HGL (Business Mobility)
Thus Voice (UK)
Telequity (Australia)
New TerritoryProduct EnhancingCritical Mass
iTouch plc
• Good year with revenues up 81% and cash positive in Q4
• Voice revenues up 269% in 2001 helped by Big Brother
• 523 Corporate SMS users in Q4, up 122% on 2000
• Smart Data messages up 149% on 2000
• 30m SMS messages in 2001
• Digital Mall – Internet e-commerce service provider sold to management
15
South Africa
iTouch plc
16
• Revenue H2 vs H1 up over 205%
• SMS Smart Data launched successfully – provide services on Vodafone, Optus and Telstra as well as ninemsn and Yahoo web portals
• Management agreement with Orange for WAP portal & Telstra Corporate Web SMS
• Strong Corporate SMS – now over 100 customers including AC Nielsen, Commonwealth Bank, Nissan, Novotel and Siemens.
• Business Mobility being marketed actively – sales include Cadbury, Chubb & Courier Post
• iTouch New Zealand operations running from Sydney
Australasia
iTouch plc
• Acquired 75% in July 2001. Call Option over 25% on formula basis
• Paid A$2.6m cash and A$1.8m in shares (in escrow). Deferred performance payment of A$1m
• IVR based prepaid airtime recharging and SMS Surepage services with Optus
• Mobile entertainment prepaid cards recently launched with retailers
• Voice Chat launched for ninemsn
• Integration gone well – £1.4m revenue in Q3 & Q4, ahead of expectations
17
Telequity
iTouch plc
• Revenue H2 vs H1 up over 32%
• Thus Voice acquisition to enhance performance and capacity
• Acquired Worldpop, strong youth brand with 140k opt-in users
• White label mobile services for media partners – BBC, Trinity Mirror, NTL and Belfast Telegraph, etc.
• Corporate SMS – 22 customers including Telecom 4 & Courage
• Launching a suite of new products in Q2 – SMS games, SMS chat, football World Cup and prepaid cards
18
UK
iTouch plc
• Acquired Interactive Media and Content division of Thus for £3.5m cash in October 2001
• Gives iTouch:-
ØLeading position in UK Voice
ØMajor brands (Clubcall, Weathercall, Racecall and Teleshare)
ØKey customers (Telegraph, Met Office and Premiership Clubs)
ØMarketing partnership with Thus
ØOpportunity to launch mobile services
• Integrating into iTouch UK and expect positive contribution before goodwill in 2002
19
Thus Voice
iTouch plc
• Revenue up 61% on 2000
• Voice revenues up 34% in 2001
• 31 Corporate SMS customers in H2, customers include Bank of Ireland, Office of Public Works and Ski Club of Ireland
• Launched suite of mobile entertainment services – prank calls, custom voicemail, animated screensavers, SMS info services
• Business Mobility sales – INM, Northern Area Health Board & NTL
• Cash positive Q4 2001
20
Ireland
iTouch plc
21
Israel• 50% Joint Venture with Globes
• SMS connectivity secured with all network operators – Cellcom, Orange, Pelephone & MIRS
• 22 corporate SMS clients at year end generating in excess of 300k messages per month
• Premium rate SMS agreement signed with Orange
• WAP agreements with Cellcom, Orange, GoNext and Comverse
• Voice portal service launched with Cellcom
iTouch plc
• Top developer for handheld Palm OS and now supporting Pocket PC
• Acquired 100% December 2000, £0.7m cash, £0.7m shares. 3 year earn-out, capped at £6.1m
• Positive feedback from international marketing. Orders achieved in all iTouch countries despite challenging targets and difficult market conditions
• Over 50 customers including Telstra-Saturn, Meridian Energy, Belfast Telegraph & Australian Post
• Preferred partnerships signed with BT Ignite, Eircell (Vodafone), Telstra, Telecom NZ and Vodafone NZ
22
Holliday Group (Business Mobility)
iTouch plc
• Excellent 18 months since the IPO – 6 consecutive quarters of growth
• Building revenues: 20% revenue growth in Q3 and 24% in Q4
• Controlling costs: £36.1m cash at year end
• Very well positioned for mobile future with:
Ø International business
Ø Strong cash position
Ø Fully funded business model
Ø Experienced management team
23
Positioned for Success
iTouch plc
Avi Azulai
Joint Managing Director
Strategy Overview
24
iTouch plc
• Average increase in ARPU driven by content expenditure
– Voice-centric ARPU is expected to come down, wireless data revenues will pick up
– Data to account for 28% of ARPU by 2005, pushing 16% increase of total ARPU from 2000 to 2005 (Source JP Morgan)
– NTT DoCoMo data 17% of total revenue versus 9% for Vodafone (Source Informa Telecoms Group)
• Growth in wireless mobile users worldwide
– NTT DoCoMo mobile internet service provides e-mail and internet access to over 31 million subscribers (Source NTT DoCoMo)
Mobile Data opportunities
2005
95%
5%
65%
35%
2001
(Source UMTS Forum)
25
Voice vs Mobile Data Revenue Projections
iTouch plc
26
iTouch’s Strategy
• # 1 or 2 Wireless ASP in each market
• Establish operator and key media partnerships
• Consumer and business focus
• Licensing strategy
• Channel development
• Early profitability and cash positive
iTouch plc
Consumer Products
iTouch has a large range of Voice (IVR) and Data (SMS) products
• Voice
– Well known brands, large capacity, relationships with global media brands
• Information Data – Push and pull SMS
– Enables users to request and receive content on their phone as SMS
• Smart Data
– Ringtones, operator logos, picture messages, group graphics
– Support for new standards (MMS) and multiple handsets (Nokia, Sagem, Ericsson …)
• Commerce
– Credit card pre-paid airtime recharge system
• WAP and PDA services
27
iTouch plc
Corporate Products• Messaging solutions
– Email, web and FTP products enable businesses to communicate with employees and clients
– 2-way SMS capability
• PDA services
– Services on intelligent devices enabling mobile PDA users to integrate with corporate legacy systems
– Off the shelf applications – iSell, iDeliver, iSurvey and iService
– Turnkey integrated solutions developed for customers
– Supports multiple data standards – WAP, SMS, CSD, GPRS & CDPD
BUSINESS MOBILITY GATEWAY
Corporate Legacy Systems
Intelligent Devices
Palm
Pocket PC
Symbian
28
iTouch plc
29
Q2 Product Launches
• Corporate Messaging
• Football World Cup
– goal flashes, half time/full time updates– daily news– logos and ringtones– fantasy football game
• Fonezone
– polyphonic ringtones, animated graphics – celebrity voicemail – spoof comedy content etc.
• Gamezone
– aggregate best of breed games providers– ticker, leader boards, polling– build sense of community and interactivity
• Prepaid Cards
iTouch plc
• Well positioned for the new opportunities
– Higher mobile data speeds
– ‘Always-on’ technology (GPRS, 3G)
– Multimedia handsets (MMS)
– Intelligent mobile devices, pocket PC
• Leading Wireless Application Service Provider
• Global reach – 20 Network operators, 80million+ mobile users, over 100 media companies
• Proven track record and capacity to roll out business model in new territories
• Very well positioned for mobile future with;
– Global technology platform
– Fully funded business model
– International reach and relationships
– Strong cash position
iTouch at a Glance
30
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