Vtion Wireless Technology AG 2013 Q1 Results Conference Call May  22,  2013  

Vtion at a Glance

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•  Offers both hardware products such as wireless data cards and mobile routers through

its wireless data terminal business segment, as well as software-based products such

as industry-specific computing solutions and mobile applications offered through Vtion

Anzhuo, a wholly owned subsidiary

•  Strong sales channel connections to all three of China’s major telecom

operators – China Telecom, China Unicom and China Mobile

•  Products range covers all technology standards, interfaces and operators

•  Experienced management team allows company to adapt quickly

•  Offices in Chinese mainland, Taiwan, Hong Kong, Germany

•  Currently has 250 employees

Our Products

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Wireless Data Terminals •  Traditionally the company’s core business,

steady results expected in this segment •  Covers all 3G and 3.5G technology standards

(HSPA+ and EVDO Rev.B) currently in use in the Chinese market

Industry-Specific & Application Solutions The company is focused on expanding its

presence in these growing market segments •  E-Agency Platform

allows insurance sales agents to electronically manage their customer base, coordinate with other sales agents, execute policy sales online

•  Online Applications “Vmarket” Applications sold through own online store, telecom operators and device manufacturers. Vtion currently offers 33,761 applications through its various sales channels on the platform

2013 Q1 Financial Results at a Glance

Q1 2013 Q1 2012 +/–%

Revenues million € 11.84 17.85 -34

Gross profit million € 2.16 3.62 -40

Gross profit margin % 18 20 -2PP

EBITDA million € 0.81 2.08 -61

EBITDA margin % 7 12 -5PP

EBIT million € 0.68 1.93 -65

EBIT margin % 6 11 -5PP

Net profit million € 0.46 2.14 -78

Net profit margin % 4 12 -8PP

Earnings per share € 0.03 0.14 -79 Net Cash flow from operations million € 5.44 3.24 68

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Cash Flow Statement

Based on the total number of shares 14,495,086 as at the end of 2013 Q1,

Cash per share is EUR  8.50.  

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　 Q1 2013 　 Q1 2012 　 kEUR 　 kEUR

　 　 　 　

Operating cash flow before working capital changes 810 　 2,079 Cash generated from/(used in) operations 6,028 　 3,525 Net cash generated from operating activities 5,441 　 3,240 Cash flow used in investing activities -50 　 -72 Cash flow from financing activities 0 　 -387 Net increase in cash and cash equivalents 5,391 　 2,781 Cash at beginning of year 113,510 　 124,516 Foreign exchange difference 4,361 　 -3,815 Cash at end of the period 123,262 　 123,481

2013 Q1 Balance Sheet and Cash Position Map

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153.5 139.7

16.6

Non-current assets Current assets

Total equity Current liabilities

156.3   156.3  

Cash Position Map as of March 31, 2013

EUR 123.3 million Total net cash

Equivalent to EUR 120.8 million in Mainland China

EUR 2.5 million in Germany and offshore

Equity ratio 89%

Of  V2on’s  EUR  123.3  million  total  net  cash  posi2on,  approx.  2.0%  is  located  with  the  German  holding  company,  while  the  remainder  is  located  with  the  Chinese  opera2ng  en22es.  

Balance sheet million € / as of March 31, 2013

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Business Development

•  Similar to FYT 2012, the majority of Vtion’s results again came from the wireless data

terminal business segment, which accounted for approximately 93% of total sales in the

first quarter;

•  In the industry-specific computing solutions business segment, we are now serving a

total of 10 clients with our E-Agency platform solutions;

•  Vtion Anzhou had a successful quarter in increasing its user base and now offers over

33,761 online applications in its various sales channels;

•  Project Fujian Connection, done in cooperation with China Unicom, continues to

progress on schedule. As of the end of April, we have established a total of 6,831

connections and early sales efforts are already underway;

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2013 Q1 Financial Results and 2013 FY Guidance

•  Despite the disappointing quarter, Vtion affirms its full year guidance;

•  For the full year 2013 Vtion expects revenues between Euro 60-70 million, and an EBIT margin between 8%-10%;

Expected Business Development

•  Steady base of demand in the Wireless Data Terminal business segment despite limited growth prospects in this market. Due to the company’s strong supplier relations and lean overall cost structure, the company expects only small margin pressure in this segment, despite the overall downward trend in selling prices;

•  Vtion has been successful in increasing its insurance-industry client base in the first part of the year, and will focus on increasing revenue-per-client going forward;

•  Vtion Anzhuo is expected to increase its presence in the online gaming market, where more differentiation enables companies to charge for downloads or use pay-to-play models;

•  Vtion Anzhuo will also seek to expand its business as a white label app store designer and operator for other device manufacturers.

Outlook

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This document contains forward-looking statements and information – that is, statements related to future, not past, events. These statements may be identified by words such as 'expects,' 'looks forward to,' 'anticipates‘, 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' 'will,' 'project' or words of similar meaning. Such statements are based on our current expectations and certain assumptions, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond Vtion's control, affect our operations, performance, business strategy and results and could cause the actual results, performance or achievements of Vtion to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. For us, particular uncertainties arise, among others, from changes in general economic and business conditions (including margin developments, the legal and regulatory framework, changes in currency exchange rates and interest rates).

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as expected, anticipated, intended, planned, believed, sought, estimated or projected. Vtion does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.

Disclaimer

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