DirectoryAssistance CallCenter Internet Solutions Subscriber Data Funnel
Company Business Market The Agenda Strategy Financials 2000 Financials Q3/2001 2
The company Founded in: 1983 Office locations: 2000 sales: Munich, USA, UK, Switzerland, France, Brazil, Hungary 30.5 million EURO (US-GAAP) Number of employees: 280 worldwide (as of June 30, 2001) (Average of 260 in 2000) IPO: February 7, 2000 at Neuer Markt Sector: Telekommunication 3
Our Management Günther Baierl (49) President & CEO Diplom Informatiker Corporate Strategy, Business Development, M&A, Investor Relations Dr. Klaus Heidenfelder (46) Member of the Board Dr. phil., Informatiker und Psychologe Product Marketing, Research&Development, Services Dr. Herbert Bäsch (41) Member of the Board Dr. rer. pol., Diplom Kaufmann Finance, Controlling, Administration, Human Resources Hans Pokorny (43) Member of the Board Diplom Informatiker Marketing & Sales 4
Our Company Structure varetis AG varetis COMMUNICATIONS L.P. USA varetis varetis varetis COMMUNICATIONS Kft. COMMUNICATIONS varetis Ltd. COMMUNICATIONS GmbH Hungary UK U.K. varetis Brazil varetis France varetis Switzerland 5
varetis - our milestones 1983 1989 1993 1999 2000 Launch of international gateways Foundation of pc-plus COMPUTING GmbH, today known as varetis AG varetis goes public varetis becomes world market leader with more than 17,000 operator positions Implementation of directory assistance system at Telkom South Africa Launch of in just 10 weeks directory search engine 6
Our Customers on all 5 continents varetis customers varetis offices On all continents: The red dots mark the location of varetis customers. 7
Our Customers indicators of our success 8
Customers distribution by company type Summary Worldwide Ordered Installed In operation # Customers 48 47 44 # Countries 24 24 21 Service Providers Content Providers Mobile carriers Fixed-line carriers # Fixed-line carriers # Mobile carriers # Service Providers # Content providers Distribution by Company Type Ordered Installed In operation # Fixed-line carriers 22 21 18 # Mobile carriers 14 14 14 # Service Providers 8 8 8 # Content providers 4 4 4 Status, September 2001 9
Customers regional distribution North America Western Europe Western Europe North America Latin America Eastern Europe Asia Pacific Rim Middle East Africa Regional Distribution Ordered Installed In operation # Customers in Western Europe 29 29 29 # Customers in North America 5 5 5 # Customers in Latin America 4 4 2 # Customers in Eastern Europe 5 4 4 # Customers in Asia 2 2 1 # Customers in the Pacific Rim 1 1 1 # Customers in the Middle East 1 1 1 # Customers in Africa 1 1 1 Status, September 2001 10
Our partners Global partners for implementation of our systems all over the world Cooperative ventures enables one-stop shopping Provides varetis with an additional sales channel CONNECTING PEOPLE 11
varetis world market share in directory solutions Region varetis customers DA calls (in 000) (* Basis: DA Call Volume, varetis market research) DA call volume 1999 (in 000) varetis market share 1999 North America 180,700 6,704,859 2.70% Latin America 71,620 1,654,275 4.33% Western Europe 1,535,130 2,910,948 52.74% Eastern Europe 29,600 349,055 8.48% Asia 33,681 2,570,637 1.31% Pacific Rim 27,000 493,382 5.47% Middle East 46,667 211,080 22.11% Africa 96,000 171,720 55.90% Worldwide 2,020,398 15,065,956 13.41% 12
Call Volume powered by varetis 2 Billion DA Calls per year are handled by varetis customers 2 Billion moments of truth US$ 1.5 Billion revenue for our customers 13
The five pillars of our success We are the market leader We are the technology leader We are present worldwide We bundle experience and competence We have excellent references 14
Company Business Market The Agenda Strategy Financials 2000 Financials Q3/2001 15
A childhood friend. Found in 0.137 seconds 16
Our lines of business Everything for state-of of-the-art DA Directory Assistance CallCenter (DACC): Software-solutions for operator assisted directory solutions Internet Solutions: software-solutions for self-services via InterNet, W@P, voice automation Subscriber Data Funnel (SDF): varetis SDF cleanses, blends and refines directories 17
varetis product suite The DACC Solution System & Application Management Computer Telephony System Inquiry System Own Subscriber Data Non-Subscriber Data Statistics & Billing Information System Security System 18
varetis product suite Operator Assisted Service System & Application Management Computer Telephony System Inquiry System Own Subscriber Data Non-Subscriber Data Own Security Subscriber SystemData Statistics & Billing Information System Best responsiveness under highest transaction volume Best search results even with fuzzy search arguments. Excellent scalability,, 200,000 to 150 million subscriber entries and up to ten million transactions per hour at peak traffic loads Flexible dataloader processes every data format Low costs of ownership 19
varetis product suite Operator Assisted Service System & Application Management Computer Telephony System Inquiry System Own Subscriber Data Non-Subscriber Data Own Security Subscriber SystemData Statistics & Billing Information System Exploits integration of computers and telephony for call completion, supervisor transfer, reconnection, number announcement,, personal greeting,, SMS,... 20
varetis product suite Operator Assisted Service System & Application Management Computer Telephony System Inquiry System Own Subscriber Data Non-Subscriber Data Security System Statistics & Billing Information System It protects the valuable databases against unauthorized access, enables different levels of user access authorization within and outside the own organization 21
varetis product suite Operator Assisted Service System & Application Management Computer Telephony System Inquiry System Own Subscriber Data Non-Subscriber Data Own Security Subscriber SystemData Statistics & Billing Information System It guarantees constant supervision of all activities in the call center. Collects all transaction data for billing: : CDR and TRxxDR 22
varetis product suite Self Service Internet DACC Solution System & Application Management W@P Computer Telephony System Inquiry System Own Subscriber Data Statistics & Billing Information System Access Gateway Non-Subscriber Data Security System Voice,, DTMF, SMS 23
varetis product suite The SDF Solution 24
Subscriber Data Funnel Merging Several data supplier for a single person/company B. Mühlhaus, 85579 Neubiberg, Mainstr. 17e, +49 89 6609023 Bernhard Mühlhaus, 85579 Neubiberg, Mainstr. 17e, (Fax) +49 89 4529249 Mühlhaus, 85579 Neubiberg, Mainstr. 17e, (mobile) +49 171 6040927 Dipl. Inf. Mühlhaus, 85579 Neubiberg, Mainstr.17e, (pager) +49 2132154862 B. Mühlhaus, 85579 Neubiberg, Mainstr. 17e, (Email) bm@varetis.de With merging Bernhard Mühlhaus, 85579 Neubiberg, Mainstr. 17e Phone +49 89 6609023 Fax +49 89 4529249 Mobile +49 171 6040927 Pager +49 2132154862 Email bm@varetis.de 25
Company Business Market The Agenda Strategy Financials 2000 Financials Q3/2001 26
DA Call Volume in Billion (without international DA) Source: varetis market research 27
Total market potential 2.2 Billion Euro 671 Mio SDF 32% Operator Assisted (DACC) 34% Self Service (Internet, ADIS) 34% 773 Mio Operator Assisted (DACC) Self Service (Internet, ADIS) SDF 787 Mio Source: varetis market research 28
Fixed / mobile telecommunications market overview 3.000.000.000 Subscriber 2.500.000.000 2.000.000.000 1.500.000.000 No. mobile subs. No. fixed mainlines 1.000.000.000 500.000.000 0 2000 2001 2002 2003 2004 2005 Source: Siemens International Telecom Statistics 2000 / Strategis World Cellular/ PCS & 3G Markets 2000 29
Market - Competition Various companies in Internet & Voice Automation 30
Company Business Market The Agenda Strategy Financials 2000 Financials Q3/2001 31
Growth Potential Directory Assistance Directory Services emerging markets (Eastern Europe) Concierge Services Western Europe 50 % + share emerging markets (South America, Asia-Pac) new services + % share Location Based Services Automation IN SMS Multifunctional Yellow Pages 32
Our vision - Example Scenario You are in a foreign city and you feel like having a pizza powered by varetis National Subscriber Directory Then you call directory assistance The operator locates the nearest Italian restaurant and tells you the telephone number and address Any additional services? The restaurants price class? What are the specials of today? Do you want to reserve a table...? No problem! 33
Our vision Customer Profiles Personalized Services User Interest Profile Mobile Email Voice Activated Dialing Customer Profiles Subscriber Directory Geocodes Location-Based Services Directions Maps Proximity Customer Profiles Corporate Directory Business Services Corporate Switchboard Secretary Service Customer Profiles Advertisement Advertisement Services Target Group Media Types Sponsoring Location Dependent Advertising Customer Profiles Customer Profiles 34 Business Information M-Commerce Services Products Pricing Special Offer Brands Opening Hours
Mobile Subscriber using Location Based Services in 2005 Directory assistance services are in greater demand than ever before! Source: Ovum in million 35
Total market potential Location Based Services US$ billion 20 18 16 14 12 10 8 6 4 2 0 2001 2002 2003 2004 2005 2006 Middle East / Africa Pacific Rim Asia Eastern Europe Western Europe Latin America North America Source: Ovum "Mobile Location Services: Market Strategies", 12/2000 36
The Directory Services Value Chain 37
Summary Growth through Expansion along the Value Chain New technologies increase demand for directory solutions (e.g. Mobile Commerce) Automation as a service differentiator Well defended Business: Mature Product Suite with core competencies in handling of high-volume transactions Directory as the link between Provider, Service and Customer Well positioned for Location Based Services 38
Investor Relations 39
Mergers & Acquisitions Intensifying of efforts in the area of M&A Suitable technology match to extend the product range Extend the breadth and depth of market penetration Thorough due diligence process Price-Performance Performance-Ratio has to be right 40
Company Business Market The Agenda Strategy Financials 2000 Financials Q3/2001 41
million EURO 35,00 30,00 Revenue 28.2 30.5 25,00 20,00 21.1 33% 8% 15,00 10,00 1998 1999 2000 42
million EURO 35 Revenue Split 67% 63% 30 25 20 15 10 54% 14.2 18.6 19.1 5 0 9.6 11.4 7 1998 1999 2000 National International 43
Revenue distribution 28.23 Mio. 7% 30.47 Mio. 6% 27,1% 28% 65,9% 66% Licences Services Hardware 1999 Licences Services Hardware 2000 44
Key ratios (Mio EURO) 1998 1999 2000 EBITDA 2.7 4.2 1.5 EBIT 1.3 2.8-0.7 EBT 1.1 2.6 0.6 Net income 0.7 2.0 0.2 Return on revenue 5.2% 9.1% 1.9% EPS (in EURO) 0.22 0.73 0.05 45
Financials and Liquidity (Mio EURO) 1998 1999 2000 Cash Flow, net -0.8 1.8 2.7 Financial Position, net -3.6 1.4 30.0 Debt (long/ short term) 4.2 1.0 0.0 46
Equity and Equity ratio Total stockholders equity (Mio EURO) 1998 1999 2000-0.6 2.7 39.5 Equity ratio* -0.4% 21% 74% * in % of total assets 47
Investments and other expenditures benefiting future periods (Mio EURO) 1998 1999 2000 Capitalized Software 0.3 0.1 0.5 1.2 1.2 2.8 Intangibles, property and equipment* Investment total 1.5 1.3 3.3 Marketing & Sales 4.2 5.8 9.1 Research & Dev. 1.3 2.1 3.5 *before low value assets 48
300 Average Headcount 250 260 200 176 190 150 100 1998 1999 2000 * *295: as of 12/31/2000 49
Overview 2000 Market Leadership in Directory Solutions Increase of Gross Profit Margin through Standardization Strengthening of Subsidiaries in the US and in Hungary Launch of Subscriber Data Funnel Investments in Marketing & Sales Organization and in Research & Development Q4/2000 strongest quarter in company history Solid Financial Structure 50
Company Business Market The Agenda Strategy Financials 2000 Financials Q3/2001 51
Revenues as of September 30, 2001 million EURO 25 20 15 19.9 19.0 23.3 22% 10 5-4% 0 1999 2000 2001 52
Revenues Q3 million EURO 10 9 8 7 6 5 4 3 2 1 0 8.6 7.3 6.3-27% 16% 1999 2000 2001 53
Revenue Distribution September 30, 2000 19.0 million EURO 6% September 30, 2001 23.3 million EURO 7% 33.6% 60.4% 31% 62% Licences Services Hardware Lizenzen Service Hardware 54
Earnings before Interest and Tax as of September 30 million EURO 2,5 2 1,5 1 0,5 0-0,5-1 -1,5-2 -2,5 1999 2000 2001 1.85-0.76-2.29 55
Earnings before Interest and Tax 3 rd Quarter million EURO 1999 2000 2001 2,5 2 1,5 1 0,5 0-0,5-1 -1,5-2 1.9-1.8-1.1 56
Earnings before Tax as of September 30 million EURO 2 1,5 1999 2000 2001 1.80 1 0,5 0.34 0-0,5-1 -1,5-1.33 57
Earnings before Tax 3 rd Quarter million EURO 2,5 2 1,5 1 0,5 0-0,5-1 -1,5-2 1999 2000 2001 2.0-0.7-1.5 58
Key Ratios as of September 30 (Mio EURO) 1999 2000 2001 EBITDA 2.6-0.8 0.4 EBIT 1.9-2.3-0.8 EBT 1.8-1.3 0.3 Net Income 0.9-0.8-0.3 Return on Revenue 9.0% -7.0% 1.5% EPS (in EURO) 0.33-0.23-0.07 59
Financial Key Figures as of September 30 (Mio EURO) 1999 2000 2001 Cash Flow, net 2.0-0.6-4.1 Total stockholders' 0.5 38.4 39.3 equity Balance Sheet Total 13.2 46.6 51.4 60
Investments and other expenditures benefiting future periods as of September 30 (Mio EURO ) 1999 2000 2001 Capitalized Software 0.1 0.6 0.4 Intangibles, property and 0.7 2.7 1.2 equipment Investments Total 0.8 3.3 1.6 Marketing & Sales 3.1 5.5 7.2 Research & Development 1.8 2.5 3.6 61
260 Employees in 2000 26 6 65 105 58 Marketing and Sales Research and Development Management Services Admin, Quality Management 62
279 Employees as of September 30, 2001 28 6 73 93 79 Marketing and Sales Research and Development Management Services Admin, Quality Management 63
Outlook 2001 Consolidation of Head Count Increase of Profitability through Standard Solutions Strengthening of Indirect Sales Channels Dedicated Market Campaign for SDF Increase of Market Share in Eastern Europe, Asia and in the Americas Lasting return to the profit zone Focus on profitable growth 64
Summary varetis is the established market leader in directory solutions fast growing telecomunications market due to deregulation and new services global presence strong partners and excellent references varetis is profitable 65
varetis Initial Public Offering February 7, 2000 Neuer Markt, Frankfurt 66
Material Shareholder Post IPO Capital Stock: EURO 3,800,000 Fam. Baierl: 9.5% Fam.. Franke: 7.2% MA/Mgmt/ARMgmt/AR 6.0% BayBG: 10.3% Supersonic: 17.0% Freefloat: 50.0% 67
Stock Option Plan Stock Option Plan Total Number of Stock Options: : 380,000 already granted: 60,500 to members of Executive Board 28,500 to other Executives 137,000 to Employees 68
Company Calender 29. 03. 2001: Annual Financial Report 2000 24. 04. 2001: Press Conference 25. 04. 2001: DVFA - Analyst Conference 16. 05. 2001: Q1 - Quarterly Report 2001 31. 05. 2001: General Meeting 2001 16. 08. 2001: Q2 - Quarterly Report 2001 15. 11. 2001: Q3 - Quarterly Report 2001 69
Investor Relations Contact: Yusuf Bulan Investor Relations Tel: +49-(0)89 / 455 66-166 Fax: +49-(0)89 / 455 66-363 E-Mail: yusuf.bulan@varetis.de Internet: www.varetis.de 70