Download ECI in Brazil

ECI Telecom
in Brazil
Aviel Tenenbaum
Executive Vice President, GS&M
Brazil: Technological Innovation &
investment Opportunities
December 15, 2008
Tel Aviv
ECI Snapshot
Global provider of equipment infrastructure solutions and services for telecom
operators with focus on Transport and Broadband Access solutions for bandwidthintensive applications (3rd. Quad play, IPTV)
Strong, entrenched positions with major carriers in emerging markets and in
developed ones
Established in 1961. HQ in Israel, went public in 1982 and became private in 2007
Development centers in Israel, U.S., India and China, employing more than 1,000
R&D engineers
2008 revenues of over US$700 million, booking run rate approaching US$1B
Installed base of over US$7 billions worldwide
2
Confidential , not for distribution
The 2007 Acquisition
On September 2007 ECI was acquired by the Swarth
Group and the London-based Ashmore Group in a
transaction valued at $1.25 billion.
Following the acquisition, the company made a very
successful turnaround, including:
Structure Reorganization - simplifying, reducing redundancies,
increasing efficiencies - cost savings of $30 million annually;
Outsourcing the manufacturing to Flextronics, the world leader
outsourcing group ($40 bln annual sales) to allow ECI focusing on
its core competencies;
Expanding product offering – CESR, GPON
Expanding to new territories – inc. Brazil and Africa (more than
10% of ECI’s orders in the first year)
Considering M&A opportunities
A Global Player
Global Headquarters
Regional Headquarters
R&D Locations
Sales Offices
 ECI has over 400 customers in approximately 70 countries
 ECI service its customers mainly through its direct sales force
 2,500 employees worldwide,1,500 employees in Israel
Confidential , not for distribution
4
Strong Presence in Mature & High-Growth Markets
CAGR
CAGR
(Svyaz Invest)
(MGTS)
17%
6%
29%
11%
2007
Sales Breakdown
Confidential , not for distribution
5
2008 – Going to a Record Year
2008 is becoming a record year for ECI:
Major wins in India, Latin America, North America, Africa
Russia and Europe
Launching of new products (CESR – awarded the Best
Product of the Year, more than 10 new customers in first 4
months)
Order intake in 2008 of over US$800M, more than 25%
growth compared to 2007 and a current run rate
approaching US$1B
Revenues more than $700M, over 10% growth YoY
Services revenues of more than $100M
Current backlog of $270 million – double YoY.
Increased profitability
2009 forecast – continuous growth
ECI in Brazil
Brazil
Vibrant, stabilized economy
Democracy
Transparency and fair laws & regulations
High-growth economy
8th largest GDP in the world: $1.3T(2007)
Growth rate of 4%
Lowest inflation among BRIC countries (4.5%)
Telecom growth target
Population of over 185M
Potential for communications:
broadband and wireless
Telecom Highlights:
Fixed Line Subs:
50M, Wireless 100M, Data: 12M, Cable TV 4M
Confidential , not for distribution
Potential Utilities customers
Confidential , not for distribution
9
ECI’s Growth Strategy
Emerging Markets
Substime
in India (M)
Fast growth
ofand
mobile
subscriber’s
Simplicity
availability
of contentbase
and applications everywhere, atMobile
any
Data services and broadband access
300
250
expansions
200
150
Strong and efficient fit of ECI’s solutions to
150
76
support such needs
100
48
50
11
261
233
28
0
2002
2003
2004
2005
2006
2007
2008*
* 31-march-2008
Developed Markets
Traffic continues to grow:
Streaming media
Mobile data applications and access bitrates
Any Service…Any Device…Everywhere…Anytime
Confidential , not for distribution
10
Brazil is Part of ECI’s Growth Strategy
Expertise of working in the BRIC markets
Experience of growing with Tier 1 operators as well as
with high growth 2nd Tiers
Good fit product offering – wireless backhaul,
Governmental and Defense, next generation networks
Financing capabilities and packages
Confidential , not for distribution
11
ECI Experience in Brazil
■ Understanding of local market and business
■
requirements is vital
■ Learning curve – 7 years
■ Competitive dynamics
■ Regulatory issues
■ Unique and tailored solutions
Local presence a must
■ Relationship – Relationship – Relationship
■ Local team and management (including support)
■ Technological innovation
■ Commitment to market and growth
■ From Vendor - customer to Partnerships
Confidential , not for distribution
12
Looking Ahead
■ ECI view Brazil as it base for Latin America expansion and
regional support hub, to further support our growth (doubling
LATAM business YoY)
■ Our focus in Brazil is to expand both with 2nd. tier as well as
incumbent operators
■ Brazil’s operators can enjoy technology leapfrog with ECI
■ Considering local manufacturing and partnerships
Confidential , not for distribution
13
Thank you!
[email protected]