itouch plc preliminary results 2001 - investis...

iTouch plc

iTouch plc

Preliminary Results 2001

iTouch plc

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• 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

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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%

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Quarterly Profit and Loss

iTouch plc

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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

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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

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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

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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

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iTouch plc

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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

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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

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South Africa

iTouch plc

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• 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

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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

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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

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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

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Ireland

iTouch plc

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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

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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

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Positioned for Success

iTouch plc

Avi Azulai

Joint Managing Director

Strategy Overview

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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)

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Voice vs Mobile Data Revenue Projections

iTouch plc

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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

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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

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iTouch plc

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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

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