NFON AG (NFN) Earnings Call Transcript & Summary

Welcome to our First Digital Capital Markets Day. I'm very pleased that so many participants have registered. And of course, I hope you will find the program interesting. We have prepared a lot of exciting topics and look forward, above all, to a lively discussion with you. What is our program for today? Klaus has been our new CEO since December last year. In our discussions with you, one question is of particular interest. What will change? Our main task for today: give you the answer. As the first topic, Klaus is going to present the details of NFON's growth strategy 2024. In the context of growth potential, we always discuss with you the market for cloud communication. It changes the competition and the options. For this topic, Dominic Black, Director Research of the Cavell Group, will give you an overview and discuss the opportunities in the European cloud PBX market. In the very fragmented market for cloud communication, we as NFON, will grow with a good product and service. After short break, Jan-Peter, our CTO, will present our product strategy combined with the presentation of Cloudya, as well as Nvoice for Microsoft Teams and give you an insight into one of our premium solutions and contact center. What good is the best product if you can't bring it to the customer? We will, therefore, take a sharp look on our partner network and welcome our colleagues, Laurent Lhermitte from France and Marco Pasculli from Italy. Last but not least, we would also like to give you the opportunity to discuss questions with the entire management team. Before we start, we are in a virtual event. So please allow me to give you a few hints to use the event platform. We would like you to participate at any point. So please use the chat tool you see on the upper right side of event platform. Just click on the tab, and please don't hesitate to use this tool extensively. It will make the event more interesting for everyone. We will also launch 3 small polls during the event. To vote, you can use the other tab on the upper right side. On the platform, you will also find the agenda and the documents for the financial statements 2020 we'll present today. During the break, you will have the opportunity for your networks activities. You will find the link to the platform on the navigation bar on the left side, just click and register. Last but not least, since we want you to be able to follow our Capital Markets Day quite easily, you will also find a technical support e-mail on the platform. But now let's start. First, I'm very happy to welcome Klaus, our CEO. Klaus holds a PhD in physics and spent more than 10 years at Microsoft. So Klaus, welcome to the stage.

Thank you, Sabina. I'm very happy to be here, and I'm really excited to present the strategy 2024 today.

Great. Klaus, my first question to you. How much of the experience you gained at Microsoft helps you now with your new role at NFON?

It's actually interesting that I think I started driving cloud business in 2009 or something. So more than a decade ago. And I find surprisingly a lot, again, in the cloud transition that the communications space is taking now across Europe. In terms of adoption speed, some of the things that continue to hold back customers and also the patterns on how to overcome those. Interestingly enough, I wasn't playing on the IT side earlier. NFON has been traditionally a telephony player, but we see now everything coming together, but more of that later.

Thank you, Klaus. Now I have the pleasure to welcome our CTO, Jan-Peter, on the stage. The first time I met him was in [ mines ] at one of our developer sites. And it quickly became clear NFON's product stands before me on 2 legs, so to say. Jan-Peter started business informatics and have been with NFON since 2009. So actually, since the beginning, and as one of the first colleagues in the NFON team. Welcome, Jan-Peter. Those years, my questions to you, certainly were exciting years weren't they?

Oh, that's so true, Sabina. I joined NFON as a consultant in 2009. The main founders were, of course, still on board at that time. So everything was operated out of 2 small office rooms in Munich, not so much like the famous garage in the Vale, but I believe it was pretty close. I immediately was put in charge of R&D and operations and joined the Board of Directors later in 2012. Meanwhile, I'm also responsible for product management, technical support, technical consulting and everything around data protection. In the past decade, I was able to build a great team. And with this team, a great product, which we will show you a bit later on. Look where we are now after those exciting years. We went public, have grown tremendously and now have our first Capital Markets Day.

Thanks, JP. Now I'm very pleased to welcome my colleagues, Petra and Jan, who recently joined the management team as CFO and CMO. Petra was VP Finance at NFON for many years. In this role, she has held various leading roles with finance departments. Since December 2020, she has been our CFO. Jan has been with NFON since 2014. He has extensive experience in B2C and B2B marketing and worked on agency side and consultancy for over 10 years for everything from small startups to global blue-chips. Since beginning of 2021, he has been our CMO. Welcome to the team, Petra and Jan. A brand new team that has a lot of plans for NFON. We will be talking about that in detail soon. The market of cloud communication is very fragmented. To start our agenda for today, 1 question for all of you. What makes us different from the rest of the cloud communication world? Klaus?

Well, if I pick one of the many, it's our clear and early pan-European focus.

And Petra?

I think my focus is on figures. I think that even for cloud and SaaS business, our share of recurring revenues is exceptionally high. And today, we were able to communicate the figures, and we have a value for -- of almost 90%. And in addition, even our additional share of nonrecurring revenue is connected with cloud business. It's like consulting fees, et cetera, and contact center, for example, and none of our business is connected with on-prem legacy business.

JP?

To me, it's a combination of many things. We own and develop our own tech stack. We target our development to the specific needs of our European customers, and we develop and operate everything from within Europe with a strong focus on data protection and GDPR.

And, Jan?

I think to sum it up, we are 100% channel committed. And we do understand the specifics and the needs of partners, and we do that in the different European countries. And I think our -- currently, more than 2,700 partners show that.

Thanks to you all. We will see us back here soon. Most of you already know NFON and the cloud market for cloud's communication well. Now we would like you to answer 1 question. What will be the drivers of success for future growth in the European business communication market? For this purpose, we have prepared our first survey, and you are now invited to click on answers. [Voting]

So the result is not really surprising for us. So 41.2% of our viewers said that the most important or successful thing is a very good partner network, Klaus. I think that fits exactly to our strategy, and I'm now very happy to forward the floor to you.

Thank you very much, Sabina. Yes, that is actually a very encouraging result, which I'm very happy about, and I also agree with it. But let me take a step back and use it as a segue to give you the full picture of our growth strategy going forward. Starting with where we want to go. NFON wants to be the leading provider for voice-centric business communications in Europe. This is somewhat new, and I think it requires a little bit of a stepping back and giving you a background on what's been happening in the industry and what we foresee happening in the future for it to work. And maybe we step right in then. So looking back, there have been about 3 waves of disruption happening in the communications space. Where, like around the early 2000s, we've seen the major move towards voice over IP, which was the first big disruption. Then around 2010, which was basically close to the birth of and rise of NFON, was the start of migration of PBX towards cloud technologies, which, obviously, we know still is in its infancy in most European markets and still going on strongly. But the third wave has already begun, and that's actually the integration and the convergence of the IT and the voice and telephony sector. And actually, the pandemic has, over the last 12 months or so, significantly accelerated the development integration of these sites. And I think it's worth taking a quick step back and looking into this. So traditionally, players in the collaboration space, like traditional IT vendors and the telephony space, also IT players in the business application space have been acting somewhat independently. Obviously, there's always been touch points and overlap here and there. But the overlap has grown. We call it integrated business communication, this overlap, which is a new sweet spot arising. And it's so powerful that most companies bet on it. And even companies that weren't betting on it had kind of -- were forced to change approach during the pandemic. So I think this has even accelerated the move. Obviously, some companies may not have done the full step considering where we are in the economy and due to certain uncertainties. But going forward, this is clear where it's going. So -- and this is the area, the sweet spot that NFON wants to play in. So how do I imagine like what does business communication entail? So let's start with basic services like telephony services, PBX. I'm excluding basic services like access and connectivity from that because there are underlying infrastructural capabilities. But this has devolved into unified communications for a while, actually, but again, accelerated significantly over the last 12 months. But there are also adjacent workloads that, in the past, have often operated somewhat independently and separately, but that growing together more strongly. Like Contact Center as a Service, where it's really about communicating and engaging with customers across many different channels and not losing the customer insight and having a clear -- a single pane of glass view of the customer. And obviously, this needs to connect with the business applications to deliver the information that you need on successful customer engagement. And therefore, it's important that there are APIs that enable the integration with these business applications. And obviously, they should do so in a manner of where the business -- the applications that are important for your customer segment you're serving and for customer vertical that you're serving in the way that supports the workflow that's actually needed to follow a certain business process being it within the boundaries of a company or across the boundaries, interacting with customers or partners. So this is kind of like a workflow view. And since this is not -- I would say this is rather complex, especially on the back end. I think it is one of the essential factors is that a good user experience needs to embed this and mask some of the complexity just in order to make it more seamless and efficient for customers how to interact with that. And that's what we call the sweet spot of business communications. And obviously, I'm very excited that the Dom Black of the Cavell Group will probably do this in a much more elaborate and sophisticated manner and explain to you how to think of it from a larger perspective, but this is definitely something we are focusing NFON on. So that said, there are actually 3 things that we'd like to differentiate NFON as a company in order to successfully compete in this space. One, obviously, this business communications space is large, so we need to have the right offering for that. And that obviously consists of a fully competitive unified communications as a service suite that actually grows out and integrates with additional applications, that serves additional workloads. As I said, sometimes, the integration with an omni-channel customer communication solution needs to be rather seamless that belongs to it, we need to build out our integration capabilities, integrating into the relevant applications for different target segments. So I think we have some way ahead of us, but this is the north star that's actually guiding our product road map. The second one I pointed out before, obviously, the user experience becomes more and more important. Like we transcend traditional boundaries of communication. It's not only the form factors as it used to be or the location of the employee or the customer, but it's also the way we interact across different business processes. So I think user experience has been important and will increase significantly importance. That's something where we really want to make a difference. And last but not least, and coming back to the survey results a bit, we are obviously 100% channel-focused company. This is -- has been one of our traditional strengths. And this, we would like to differentiate ourselves not only -- we're doing it now, but we would like to build it out. We're actually revamping our partner program, like all the way from just onboarding partners, training partners in presales, activation and post-sales opportunities, also updating the tooling for that, which we'll present in fall. It -- we need to make partners even more successful working with us, and this is where we really focus on. So if I have to summarize this in, like, under 3 headlines, it would be the following. Target. Yes. Our target is clear. We have 3 differentiators that we need to differentiate our offering in the market, successfully addressing urgent customer needs that some customers may not be so aware of today, but definitely, will in the next couple of years. That's where the market is moving. That's where we want to be, and that's where we want to make a difference as NFON. The second one, as I said, in order to compete effectively, we need to build out our product portfolio. We need to enhance what we have in the product road map now and will deliver to the market this year. And we have significant investments plan on that side. We also see a lot more on a little bit what's going on under the hood and how to think about that later in the day. And then scale. Just talked about our partner network. We have currently more than 2,700 partners across the European footprint that we are serving right now. This has been a traditional asset of NFON. We consider ourselves a partner company, and it's very important that we scale up what we deliver to the market and enable our partners to deliver that to the market. We'll invest more to make sure we even grow that partner network and do that across the entire geography we're serving. Okay. That brings me already to the key measures we have planned for 2021 and these are -- it's a little bit less than 3 weeks ago that we raised some capital in order to accelerate our growth path and the measures that we have planned are -- can be seen here. So let's start with one that I have already focused on a little bit is our product development. That's obviously at the heart of what we bring to our customers. It's important that we keep on delivering innovation even down the road. So that's very important that we also double down on investments here. We've actually planned to increase our technical resources by more than half just from the end of 2020 to the end of 2021. That is a quite ambitious goal because we all know that these technical resources are scarce commodity in this market. We are very happy that we established our development presence in Lisbon, Portugal last fall, which has been ramping nicely and which will be crucial for us fulfilling these ambitious targets we have. The product we need to bring to market need to be more and more powerful and grow. Therefore, it's important that we also look at accelerating the development path by looking at partners. And there are actually 3 layers we can think of how to work with partners. One is the quickest, let's just do commercial licensing agreement to round up our portfolio potentially, where it's not like strategically absolutely crucial. Second one, if we need to secure access of a critical technology but we don't want to invest, like develop it on our own in order to save time and it's not like absolutely core to operations, we may as well consider acquiring a minority stake in technology partner. And the third one, obviously, is if we think that IP is important to us and will be core of our cloud-native tech stack, then we think about acquiring majority participations in partners, classic M&A, which is also one of the use of proceeds that we have planned for the capital we raised. The whole goal, obviously, is come closer and faster, closer to that vision of having a powerful integrated business communications portfolio that we can take to the market. And any profitable growth, we can accelerate with that, that will obviously be a big priority for us. The next investment, emphasis, obviously, on marketing, because scaling the channel will require some funds. That's also the reason why we have very ambitious goals to fuel that growth in this sector will increase the spending by more than 50% also in 2021, focus on our channel growth, like growing our channel and bringing the value and innovation to the customers already now this year. Also fueling growth this year, which will also benefit us largely in the following years. And the more innovation we bring in the market, the more partners we have that are able to help customers realize that value from these innovations, the better for all parties involved. An important factor of growth is also the customers, and I come to that in a second in a little bit more detail. But traditionally, we've been focused on the SME market, which is the largest market, and this company is usually move first towards cloud solutions, but our tech platform has grown more and more powerful. So we can now easily also serve enterprise customers, and I'll go a little bit into detail on that. And the same one is our geographic approach. In the past, we've been largely focused -- besides our -- with like our home base in Germany, Austria and U.K., towards Western Europe. I think it's time we look at the growth opportunities in Eastern Europe. And some of these markets are underpenetrated and underserved. It's -- there might be a very interesting investment opportunities, which is why we have decided in actually using some of the accelerated changes in the communications space and go into CE. So customers. I told you about kind of like where our traditional sweet spot was. It was basically mostly in the SME market, maybe not the very low end. But pretty much like a 20 to 500 PBX seats kind of customer, obviously, it depends a little bit on the customer solutions. We also serve customers in the SoHo segment, but mainly through wholesale partners where we can go all the way down. But in the past, we've had customers that actually use our technology to scale even beyond that range into the 5-digit PBX seats. So that the platform can handle it. We have never had the priority of building up an enterprise sales force because then, you often come into doing individual customer-tailor solutions, which is never our goal. We want to have one scalable platform we can use across all our target segments and across all our geographies. But as I said, it's become more and more powerful. So also larger customers can be addressed. So our focus will be to work with partners who aim to serve that area of business. Also maybe not traditionally just telephony partners but also IT partners. We all know that Microsoft Teams has made a fantastic development through the pandemic. There are many customers who are planning or implementing large scale deployments. Often these partners lack the voice capability. And therefore, it -- we can complement that and help roll out and implement the solution at our customers and make it productive and thus also enlarge our scope of customer size and even selectively scale beyond that. Okay. So then geography, I've mentioned. So we think about the way how we operate in Europe, basically in 3 dimensions. One is we call the established markets, we already have a significant market presence and where we deliver absolute growth. Obviously, Germany and Austria are -- come first in terms of relative market positions. But also in U.K., we've been successfully operating at high scale. Obviously, U.K. is a very advanced market when it comes to cloud PBX penetration. But these are the markets where we actually deliver absolute growth. But we have many other interesting areas in Europe, and we basically went into France and Italy, 2 years ago, Spain, I think in a little before. These are also countries that have a lot of growth potential going forward. These are large markets. So this is something that adds relative growth now to the top line of NFON. And if you look to the upper right, we've actually now also made the step into Poland, where we not only -- do not only operate through partners any longer exclusively as we do in many other areas of Europe. But we actually also need own feet on the ground in order to honor the potential this market has with currently still low PBX penetration and significant growth potential. And as I said, like in Eastern Europe, it's probably right now the right time to play. So this is also where we expand our ambition a little bit. And yes, I think we'll discuss many of these things for the remainder of the day. Let me just summarize, again, that our strategy, we have a clear target in mind. How we would differentiate ourselves in the market with an integrated business communication solutions. We know what we have to do on our product side to enhance our offering, to deliver more and more value to our partners and to our customers, to down the road to develop -- to have more innovation in the pipeline that we can bring to the market and how better to bring this to the market into an extensive and ramped up and even more effective partner channel than we have today. Thank you very much.

Thank you, Klaus, for your presentation. As you can see, there are already a lot of questions. So the first questions we see, where do you see currently the biggest competitive threat in Europe?

I think, I mean, obviously, the dynamics across Europe are somewhat different with usually the U.K. being one of the -- on the forefront of many of these developments because this is usually the first market. Also, U.S. players are entering, so there's a lot of competition coming from. We've seen an explosion of the IT vendors in the communications space, which, as I said, like I see the increased competition, but net-net, there's more opportunity from that. So I don't see it negatively at all. I think these are the battles being fought now. And luckily, the market's big enough, the opportunity is huge enough that there's enough land to grab. So I think this is probably kind of like where the two of the things that we see develop most prominently right now in these markets.

So -- and the next question, NFON has been growth-focused in the past year. Why do you increase marketing and R&D spend now?

Okay. Well, first of all, I think, yes, we have been growth-focused, and we should be growth-focused for the future as well. So I think, as I also said, like in the earnings call today, I think we may -- because of the pandemic and the economic uncertainties that some customers and our partners experience, we may not have been aggressive enough on spending marketing and ramping up the channel. So I think there's more we need to do on that to accelerate our growth. And especially that we'll see in the year '22 plus. And then on R&D side, now that we have the capabilities to ramp up our resources faster with our Portuguese operations, we should actually take advantage of it because there's so much more we can deliver to the market with these different workloads growing together, it's a fantastic opportunity to increase investment. We have lots in the pipeline until this year. And we have like achieved this major milestone of 0.5 million PBX seats. But what now? I mean, in terms of -- obviously, we want to continue that growth, but it will not be a linear growth just on the PBX. As I said like we are like in the third stage of disruption now, we can upsell on these sockets. So we need to load our innovation pipeline with what we've traditionally called premium solutions to be able to upsell on that customer base, plus, of course, gain additional customers that we want to have.

Fine. And the next question, where are the main verticals for NFON?

Okay. So I think that traditionally, we've had directly 2 priority verticals. Maybe that when we chose those, we weren't so aware of the immediate danger of a pandemic hitting the world, which was basically retail and hospitality. While retail, surprisingly, has still operated rather well, although obviously, many of those have suffered from the pandemic. Hospitality has done basically a full slowdown. But actually, right now, like even in Q1, like we have some large opportunities with discussing with customers across different geographies that are already getting ready to make that next leap of modernization. But -- and through partners, we've served many health care customers, for example. But usually, the way we work is we work with partners, try to like work with them to build a powerful solution, and often they target it to certain verticals, and we support that. And this has definitely has been a start of the journey and not the end.

So -- and I think the last question before we turn to the next topic of our agenda for today, when do you expect to break even in Southern Europe?

Okay. So I think I was asked a question like today in the earnings call, when we'll be above the -- when we'll hit the [ EUR 1 million ] mark. I think it really depends on how profitable the opportunity is, we will get there. We said like we can achieve it this year if we want to. We always think about accelerating inorganically if that is a good opportunity, but only if it's a good opportunity because we focus on quality of growth, not just on quantity of growth. So this is something that's imminent. But we constantly revisit our investments, as I said now, like we have seen that in CE, there's some great opportunities. So we may always move our chips around. But -- so I think with that said, I also -- on a personal note, I haven't even visited any of our operations across Europe because of the special situation we live in. This is obviously one of my main priorities for the remainder of the year, hopefully, sooner than later. And I think I'll have a much better view also on our geography -- geographic opportunities in a couple of months.

So okay, there are actually many more questions, but I suggest that we can take these into the final round or into the break. Klaus, many thanks for that for now, thank you.

Thank you, Sabina.

Dear viewers, in the discussions we have in Europe markets for cloud PBX is, of course, always -- or the market for cloud PBX is, of course, always the first and one of the important topics. That's why I'm very pleased to welcome Dominic Black, Director Research of the Cavell Group. With offices in the Netherlands, Belgium, Portugal, U.K. and the U.S.A., the Cavell Group was founded over 15 years ago by a team of senior executives. Since then, Cavell has delivered research consultancy professional and educational service in well over 45 countries spanning the world. Dominic Black joined Cavell Group at the beginning of 2013 as U.K. market analyst and has built a great knowledge of the European VoIP markets. Accordingly, he has authored research and writes papers and speaks and attends industry events around Europe. We have now a small problem to open the line to Dom, but I think this will come on very quick. So I already saw him on the screen. And so please have a bit of time. So Munich is calling London.

Can you hear me?

Yes. I can hear you.

Can you see my slides?

No -- yes, your slides, I can see your slides, Dom.

Wonderful, okay.

So welcome to our Capital Markets Day, Dom.

Thank you very much.

I saw your picture. And yes -- no, I think I can see your picture again. So welcome on the stage here, and I just gave a small introduction of you. But I'm now happy that you are here and that you can give us a deeper insight of the high attractive European growth market. And I'm very happy to give you now the stage. Thanks, Dom.

Thank you very much, Sabina. It's my pleasure to be here. Thank you very much to the whole of the NFON team for having me here. It's a great opportunity for me to share some of what we're seeing in the market with the audience and look forward to answering any questions as we go through. So just to give you a bit of background on who Cavell are. I think it's important just to kind of set the scene. We're a research firm focused on the cloud communications market. And we work with some of the industry's leading providers, and we've had a long-standing relationship with NFON, helping them really understand what's going on in the market, what's -- how the market is evolving and also, how we should be looking at the future, what different services we should be bringing out. And from a competitive standpoint, what's going to be happening through that. So I thought I'd take you through today a little bit around what we were seeing before COVID. Obviously, COVID in the last year in 2020 had a massive impact on the market in general. But I think it's interesting and important to set the scene first of what we were seeing. So pre-COVID, we were looking at a number of different lead drivers for the market and why it was growing. One of the key ones that we've been interested in is the workforce generational changes that are coming into the market and really changing the way that businesses communicate. Workforce generational changes have impacted popularity of enterprise workforce communications. As we're seeing younger generations who are more digitally native and much more inclined to utilize video communication technology. Research and data that we've seen shows that by 2025, Generation Z will comprise 36% of the workforce, further driving demand for video communications. The levels of older generations within the workforce who are both anecdotally and practically less likely to have engaged with newer technology like video is falling. And this was even before COVID when we saw the whole move to video. So we saw this huge shift coming through over the last few years as younger people are entering the workforce and really driving different ways that we're going to communicate. We also have to look at consumer technology habits as well. Consumer trends invariably enter the workplace and communications are arguably the most viable area for that proliferation. People want to communicate and work in a similar fashion to how they communicate in their private lives. And the rising popularity of face-to-face video calls in consumer settings has further driven businesses to ensure that employees don't default to consumer applications, adding to the problem of shadow IT by giving the nice solutions which enable video and other collaboration solutions. We also saw that enterprises are happy moving all their applications to the cloud. And as you can see on the graph here, this is from my enterprise insight report, looking at the U.K., but this trend has also shifted across Europe as well. As we see coming, the number of applications is increasing by year-on-year as businesses move their services to the cloud and much more in the last year than we've seen in any previous years as well. And essentially, the large businesses using more than 5 cloud applications forecast to increase from 55% to 71% in the next 12 months. And even in the SMB segment, which has been really the slowest to adopt some cloud applications, typically using less than 5 applications, we've seen that around 71% of those will be using cloud applications going forward in the future. If we then talk around this in the cloud communication space and look at the market moving to -- from an on-premise PBX into cloud PBX as well, we'll see later on that, that data really reflects through this as well. One other thing that we're seeing pre-COVID, that remote working was increasing and the demand for remote working was definitely coming through. In 2019, 20% of companies had over half their workforce working remotely. And in 2020, this was just before COVID hit that we did this study, 41% of the companies had over half their workforce working remotely then. We expect that to grow massively over the next year and continue going forward into the future as well. But already before COVID, we were starting to see businesses coming and working from home and enabling new ways of working through that. So if I want to look at what's happened over the last year, COVID has really been an inflection point for the industry. We've seen massive growth across the market of people using different communication tools as they've been forced to work from home over the last year. And this threw off a number of challenges the businesses around COVID. This was a study we did as COVID hit of what the biggest challenges were from COVID. And the top 4 that came through were security issues, that now businesses were having to work from home, how are they securing that end-to-end connectivity, and how are they securing the edge of their networks. Now we have people working from home offices, where previously, their whole edge was their work premise. There was also an issue around internal culture. How do you enable good internal culture when people aren't meeting face-to-face? And I think the last 2 points are very valid to our space as well. End users didn't have the right hardware to do remote working and also the existing solutions lacked the acquired capabilities. And that's a really important thing to think of over the next few minutes is why people who were using on-premise solutions weren't able to continue to communicate when they were going from home. One thing that came up from this was the massive increase in usage of collaboration software. We saw services like Zoom, Microsoft Teams, Google Meet, Webex, GoToMeeting and Slack all boomed as people went to homes and worked out how they were going to collaborate. We also saw massive increases, we'll show in a little bit, in the growth in cloud communications technology from a calling perspective as well. But I think the Microsoft Teams one is really starting to drive forward here. And really interesting as we're seeing more and more people integrate, like NFON, right into the Microsoft Teams environment and into the Microsoft ecosystem, as we saw. That has, on top of that, driven massive usage in terms of video on top. So in 2019, when we are looking at how many businesses we're using video, only 26% were using video regularly. That's increased now to 55% in 2021. And of those businesses, 46% of those expect to use more video. On the left-hand side, you can see the number of users on Microsoft Teams increasing dramatically over the last 1.5 years as people were flocking to these solutions. And one of the issues that Microsoft Teams has is the phone system within it is actually pretty poor. So more and more businesses are looking to providers like NFON and others to enable calling through the Microsoft Teams solution and have that stable calling capabilities and fully-featured PBX functionalities that Microsoft can't deliver at the moment. So that shows a massive opportunity there for businesses to come in and use those technologies and work with companies like NFON underneath. One other thing that we saw come up from the issues that COVID has risen is around the network and what's in businesses' network. As you can see here, obviously, security comes up high when using cloud applications. And as more and more businesses start using more cloud applications, security is going to become more of an issue. And they're going to start looking at businesses which have security and secure platform at the heart of what they're building on the cloud. We also see that there's obviously massive issues around improving the performance of business applications and enabling and improving the performance of video within that. It is certainly something that we see coming through. On top of that, businesses have a huge range of issues and challenges that they need to face in the future. How are they going to enable remote workforce and a hybrid workforce as they go through this? How do they make sure that they can deliver the best communications and working experience to all employees regardless of location? And that really comes to going to the cloud and enabling through the cloud. We've even seen it on-premise deployments do not work in a remote environment and are very difficult, and businesses that weren't able to move to the cloud over the last year really struggled throughout that. So that's [ the main key point ], how do you enable the remote workforce and also how do they move to the cloud? Another one on top of that is how to secure all of that whilst we go forward, so enabling security. And all this comes down to is a business that's going to choose the right vendor who has all of those points out there. So how is this going to impact the communications market? We've seen massive increase in collaboration. But from a calling perspective of what we look at now or when NFON really fits into this, there's a huge market opportunity across Europe. This is from our latest data where we went out and we survey the market every 6 months and look at how the markets are growing. We've been doing this for the last 15 years across Europe and North America as well, working with providers to really understand what's happening here, how the market's expanding. And as you can see, markets are at very different stages of development in Europe. The U.K. is the market leader in terms of net new users. And we've seen growth over the last 6 months really -- and 12 months, really coming through, not just in the SMB segment, now into larger enterprise segments. The 2 markets, which I'd say are really core in Europe when I'm working with the providers of where is the biggest opportunity is in the German market and the French market. The German market has been led by NFON, whose the market leader in that space in Germany. And they be one of the core drivers of that market, educating their partners and educating the market on why moving to cloud is a good option and why is it the best option for the future. We've seen many providers look at entering the German market, but failing to do so due to not being able to have a local presence, not being able to work with the partners out there. And not having the right security in the right compliant to the heart of what they're building on the cloud side. So there's a real unique opportunity in Germany. And I think that's why we're seeing NFON being so successful in that space. Across other markets like France, we're still seeing penetration rates very low down there and a huge opportunity coming out, almost as big as the opportunity in Germany. And then all the other European markets, although they have smaller available markets in terms of the number of potential users in there, we're going to start seeing those penetration rates increasing over the next few years. We've seen markets like Spain now become more and more competitive, people seeing the opportunity come into there and start to see massive adoption across the markets. From all the conversations I've had with both enterprises and channel partners and service providers over the last year, they're all recognizing now that cloud is the future. Businesses over the start of last year were really sat there, trying to work out what they should be doing from a strategic point of view. And we saw a lot of smaller businesses really working out, okay, we need to move to the cloud and we're going to have to do that as soon as we come out to some kind of lockdown. But what we also saw was larger businesses starting to really drive forward. Historically, the cloud communications market has been SMB-focused market. And across Europe, that's where we've seen the most growth. Although over the last year, we still saw a significant number of users added in the SMB. From a percentage growth rate, we're seeing growth rates of around 30% in the mid-market and large enterprise segment now as we're seeing businesses of those sizes really going through a digital transformation process and realizing that cloud is their future. That's going to create huge opportunities over the next few years and businesses that are able to scale up and offer the right solutions in those spaces and offering services like contact center, like video, like integrations into new ecosystems, like the Microsoft ecosystem are going to be the ones who are going to be winning out there. But there's a huge opportunity coming through, and not only in the mid-market as well, but in that SMB space as well. One thing that we've also seen come out at the back of this has been the depth of the on-premise PBX. And in terms of logos here of some of the key PBX providers who have been operating, both in Europe but also globally. And now all of them have come back and said that their future now is going to be cloud and that cloud is at the heart of their core proposition. Some of those providers have realized that cloud is not going to be -- they're not going to be able to take their customers to cloud themselves, and they're now working with other partners to be able to do that. I think that signifies a huge opportunity for cloud-first providers to go to those PBX spaces and start speaking to those customers and saying, "We can help you take on that journey." There's still a huge number of PBXs out there in the market, which should be able to move to cloud over the next few years. I think when we look at some of those providers as well, the ones who haven't been able to transition to cloud. The likes of Panasonic announce that they're going to be taking a step back from the market and stop just manufacturing and distributing their on-prem PBX systems by 2023. So we're starting to see all of these providers start to go where we don't want to be in this market anymore. We need to look for a cloud opportunity to go forward with this. And I think that's a great opportunity to go forward on this. So over the next 5 years, where is the opportunity? And where will we see the growth coming from? As you can see here, the market's currently just over 17 million users in the European market. And over the next 5 years, we're expecting that to grow to over 45 million users. There's a huge opportunity for growth and across multiple different markets. And I think the people who are going to do well in that are the ones who are able to target all the different markets from a multinational perspective. We're seeing more and more providers looking at how they can grow internationally with, I'd say, limited success at the moment and being able to target multiple markets like NFON do is a great opportunity for them to grow in all of those as they've been able to grow organically with those user bases. From a penetration standpoint, we're seeing penetration in European markets grow from around 17% to over 44% over the next 5 years as well. I think that's a really interesting point that we should really hammer on to there. Even though over the next 5 years, we're going to see considerable growth in multiple different European markets, that 44% still shows that over half the markets in 5 years' time won't have moved to the cloud yet. And I think that's fascinating when we look through that of going -- not only is the market going to be growing over the next 5 years significantly, there's going to be significant growth after the next 5 years as well. So this isn't a short market where everything is going to go very quickly. I think there's a huge tail -- long tail to this market that we could continue to grow and seeing providers and businesses growing and moving to the cloud over the next 5 years and beyond. From a revenue perspective, we're expecting that the market is going to be worth just over EUR 3.75 billion in 2025. Currently, the market is worth EUR 1.7 billion -- EUR 1.9 billion. So to see the market over double in that period -- almost -- sorry, almost over double in that period shows a massive opportunity for providers to take advantage of this. So to wrap up, I'd like to -- and look into who do we think is going to win? Who's going to be the ones and what do they need to do this? There's obviously lots of competitors in the market. I think there's huge opportunity for those who are going to get it right are those who are going to adopt a cloud-first approach and make sure that they're driving first with the cloud. From a second, I think those who know their customers, who are speaking to their customers, understanding the demands of them, going out and speaking to their partners and making sure that they can really keep up-to-date with innovation, making sure that they're taking the right services to market and knowing what they're delivering and offering them a range of different services. The last 2 points there, integrating into relevant ecosystems, realizing that some of your customers are going to be working within the [ Microsoft ] system, and you're going to be wanting to be using that and making sure you're going to be part of that and working out how that's going to play out in the future. And last but not least, to take advantage of this huge opportunity, you're going to have to scale internationally and have international scale. I think operating in one single market is great and you can grow that opportunity. But we've seen from multiple different companies that having a multinational approach is going to be the way that you're going to grow your business significantly in the future. I'd like to say thank you to NFON for having me here. I'll be open for questions. And thank you very much.

Thank you, Dom, for your presentation. Before we start answering the questions, welcome back, Jan-Peter and Klaus. During your presentation, a lot of questions were asked, and I'm afraid that we probably will not be able to answer all of them anywhere. The first question is how do you see -- you said a little bit about Microsoft. How do you see Microsoft Teams in the market?

So I think Microsoft have, obviously, we've seen some numbers there that Microsoft Teams from a user perspective, the numbers have grown significantly over the last couple of years. And we can't ignore that they're playing a huge role in this market. What we do see though is that their PBX solution that they have in place isn't really up to standard. And this is kind of a one size fits all. And if it doesn't fit what you have, it doesn't work so well. And we're seeing a massive opportunity for providers who can step in and play that role of being the cloud PBX underneath there. We've seen when Microsoft Teams has gone down and the services stopped. The businesses who were using just Microsoft have realized, actually, this doesn't work for me. I can't communicate with my customers anymore because I don't have a way to do that. So having a third-party solution is certainly the way that we're seeing a lot of businesses look for, just from a resiliency point of view, but also to offer better feature sets throughout that.

Okay. Klaus mentioned in his presentation and also our new strategy is targeting the CEE markets, especially Poland. So Dominic, you do not have mentioned CEE. Have you have a better view on it? And probably Klaus can also add some of our views on the CEE market.

Sure. So we did a bit of research on the Polish market earlier this year, and we were talking to different customers and providers about that. I think there's a huge opportunity in the Polish market. It's not a market we've studied massively in-depth like the countries, which we highlighted there. But we certainly see that there's a number of providers so is the key incumbent providers, the carriers there, who have a significant portion of the market. And there's also an opportunity outside of that. We haven't seen too many new start-ups enter the market. So I think there's a great opportunity to go into that market and disrupt that [ hedging ] many of the large providers. From a cloud PBX perspective, we still think penetration rates are pretty low in that space. So there's a huge opportunity to come in there and offer a pure cloud solution and really help businesses in Poland move to a more remote and more cloud-first model of how they're going to work. And I think that's going to be exacerbated as we've seen from the pandemic that they're going to be looking for these kind of solutions.

And Klaus, I think this is exactly that what we are pointing out. If we say we focus now on Poland or CEE as new countries that we have there, more -- less competitive but more potential market, right?

Yes. Basically, it's true. The overall market is smaller, but the size of the market share, you can gain there more easily and profitably is bigger. And obviously, the penetration is even below our Italian and German level. So it's still massive. And yes, it's definitely something we can -- we should look at. And we have already identified a couple of really good allies to make a segue into those markets.

And Dom, you also mentioned in your presentation that our users need best communication environment as well as security. And I think JP, this is exactly that what we are also having our focus on our D&A, isn't it?

That's correct. It has always been in our D&A from the very beginning to be extremely compliant to develop everything and operate everything out of Europe, right now out of Germany, be very GDPR compliant and so on. And I believe this is also something, which makes us very special when it comes to, for example, entry barriers, to -- from outside companies trying to enter Europe. Especially in some countries like Germany, the users are very keen and very focused on really having data security, being GDPR compliant. You see this out in the market with new players where they tend to have a little bit of struggle right now, an increasing struggle and increasingly being asked by authorities and so on, whether or not everything is in terms of data security, data privacy is correct. This has never been a problem for us because we've been developing it exactly into that target spot from the very beginning.

And Dom, there is a very interesting question, I think. Do you think that the various and different regulations in Europe are market barriers to entry or market barriers for our U.S. players? And what -- which time lead does this give NFON?

I think it's -- we work with a lot of U.S. providers who're looking at the opportunity in Europe. And I think -- I don't want to disparage some of them too much, but sometimes they look at Europe as a single market. And as much as we know that we have a single market, it still doesn't operate as a single market or a regulation point of view. So it's a big struggle for companies who are looking to expand across Europe of how do they gain not only knowledge of the different compliance and regulations they need to take part in each market, but also how do they sell in each market? How do people buy? Who do they want to buy from? What does that channel look like? What language capabilities do you need? And I think that's a real struggle for a lot of them of -- it's not like going to a new state in America where it's pretty much the same. You've really got to understand each of the markets you're going in and be local. And I think that's -- being able to be local on an international scale is certainly a very important trait for any business looking to expand across Europe. Because I think is why when we look at some of the European competitors, certain U.S. competitors who come into Europe, and not only used U.K. as a jump point into Europe. But realistically, their market share and market penetration into mainland Europe has been pretty low and pretty poor. But I think it's certainly around that localization point of view. I think NFON's got a good opportunity with that multiple different teams in multiple different countries to be able to leverage that.

So probably the last question to you, Klaus. How have you or have we, as NFON, experienced the impact of the pandemic on the markets?

Yes. I think I alluded to a little bit in my initial presentation. But obviously, I think customer behavior has changed. So I think that we've seen like less project business, more emergency business. So filling immediately emerging needs, like sending people home, they're using OTT solutions and then asking us on how we can integrate it somewhere in the setup. Often quick fixes. Actually now, many of these customers come back and say like, you know what, it's not working with us. So we need a kind of integrated solution, how can we do that? Some of the customers actually already started to do that. Some of the customers say, like you know, we don't know exactly when we'll be operating in a somewhat what we think a more normal way or more like a sustainable ways, so let's wait a little bit. So there was definitely a little pause in some areas. As I said, in our focus verticals, it actually hit us pretty hard. Overall, though, I think in discussions with customers and also partners, the trend has been strengthened. The trend -- and nobody argues, the trend and where they have to go. It's just a little bit -- when is the right step. And obviously, us serving a wide area of European markets. Depending on how the pandemic developed, there's always been somewhat a different pattern across Europe, what markets were hit a little harder than others. So I think it's been definitely an interesting ride. We really hope that we'll get back to across all markets to more like business as normal. Many markets have done so. And I think, but we've all learned. And I think one other thing I mentioned before, the Microsoft Teams explosion, as also Dom pointed out, has actually really opened a couple of new doors for us. So people always say, like, "This is more competition or not?" Yes, it's more competition, but we have more opportunity than we would have had if they hadn't like entered the market. So I think we have lots of opportunities where we actually play nicely with them. They have been very good at introducing us to their partners to help their partners bridge the last mile at the customers. And I think that's the right approach. You really have to see what does the customer need at the end. The customer doesn't need like one solution or the other one, they need a total solution that really works and delivers value. And for that, we have the opportunity to work with Microsoft Teams partner community, and they have it with us. And other few competitors with that voice expertise. And I think it will deliver business value, and it will be felt on -- in both camps.

So thank you, Klaus. Unfortunately, we have to come to an end. But before we end, it should be mentioned that Cavell holds summits on a very regular basis. And for those who are now curious, you can find the next event dates on the website, cavellgroup.com. So Dom, thanks again for all the interesting insights, and I'm looking forward talking to you soon. Bye-bye.

Thank you so much, Sabina and NFON. It's been a pleasure. Thank you.

Bye.

Thank you, Dom. Thank you, Dom.

Dear guests, it's now time for a short break, about 10 minutes. During the break, you will have the opportunity to take -- to talk to the management team in our networking platform. We will let you know due time when we will continue. So have a nice break and see you soon. [Break]

Welcome back to the second part of the Capital Markets Day. To start, I would like to invite you to our next small survey. The current situation challenges us to think about communication and communication channels. This raises the following question: What is your primary communication channel? So you are now, again, invited to click your answer. So you are, again, invited -- So JP, we do have the results, and they are not really surprising. We see 45% said that their primary communication channel is email. 40% said that their primary communication channel is telephone. 10% said that their primary communication channel is video. And 5% said that chats is the primary communication channel. So telephone and email, not really a surprise, are still the main communication channels. And JP, I think the result is, in total, what we anticipate with our strategy, right?

That's right, Sabina. So I -- let me take this opportunity now to present our product portfolio, hands on. Welcome to Cloudya. The cloud PBX market is growing together with adjacent markets such as customer service and unified communications to one large business communications workflows market. But what's the prerequisite? An integrated business communication solution combining voice and video, chat and presence. All players in the market try to close gaps to provide customers with a fully integrated offering. Business communication expands into formally separate areas such as contact center, analytics and workflow management. Integration of processes and tools via APIs, therefore, becomes more and more important. Let me show you around our core product, Cloudya. All you need to do is to open your browser, preferably Chrome, and go to [ staffs.cloudya.com ]. Here we go. Have your credentials ready. Each user has its own set of credentials, simply enter your user name and password, and that's it. This works on any platform, Windows, Mac or Linux. On Android and iOS, you just load the app and use the same set of credentials. Easy, isn't it? And the best part is you take all of your settings and all your entire work environment with you since it's in the cloud. Cloudya works wherever you are and whatever device you use. So after the login, you will find yourself in the default view. Let's look around. Shall we? So in the middle, you will find all of your favorites with their current present status. On the left is the main menu, phone, which is what we're seeing; history, so you call history and voicebox messages; contacts, which lets you manage your phone book; and conference, which is your own conference center for audio and video conferencing. Settings allow you to customize your Cloudya just the way you like it. For example, the language of the user interface. As you can see, Cloudya is already available in all major European languages. On every screen, you have access to the most essential settings, call forwarding profile, which we will show you a little bit later; do not disturb, ringer on and off; and of course, which sound and video devices you want to use with Cloudya. But how can you make calls with Cloudya? There are multiple ways. Basically, the way you like it. For example, you can use a dial pad and simply dial the numbers or use your favorites and either double-click them or drag and drop them to the call area on the right. Or you just access your contacts and search the contact you would like to call. And then just double-click it. The search on top is available at all times, simply enter the number to dial or start typing the name of a colleague or contact, as simple as that. Of course, we also have great apps for iOS and Android. The look and feel of Cloudya is optimized for each device, but you get the same user experience and functions, for example, favorites, conferences or call history. Taking calls is just as easy. Just press the green button for the incoming call, and that's it. Please note that the call is immediately shown on the right side of your active call area. This area allows you to manipulate the call, you can mute or unmute, end the call or you can initiate a 3-way conference. Earlier, I mentioned something like called call forwarding profiles. Let's dive into those. With call forwarding profiles, you can easily teach Cloudya how to react on incoming calls in certain situations. Let's create a new profile, just in case you go on holiday. We add a new profile, give it a name, assign a short cut to it and activate it. Now in this profile, you can forward calls, for example, immediately. In this example, we forward everything to the voice mail. Notice the yellow call forward indicator, as with this setup, you will not be receiving in any more incoming calls. Or you choose a different target. Just enter the destination number or search in your contact database. In this case, I forward everything to my assistant or choose the target in case you're busy on the phone. Or when you're not available to take the call, and you're not able to take the call within, for example, 50 seconds. Of course, you can also forward calls to external numbers. In this case, let's forward to a mobile phone. And one more cool thing. We support what we call source-based call forwarding. So we can teach the system to behave differently when your assistant calls or, for example, your family or you can blacklist certain callers. All this combined with profiles gives you incredible flexibility, which the user can control very easily. You can switch between these profiles in the web app, the mobile apps or your physical phone on the desktop. And what's nice, since your PBX is in the cloud, so are all your settings. So regardless of where you make these changes, they will always be synchronized. Let's take a look at conferencing. In your conference center, you will find all predefined conference rooms that you have subscribed to. In order to enter one of these conferences, simply double-click it. And since you're already authenticated, all necessary conference pins, etc, will be provided automatically for you and you can dive right into the conference room. Let's invite an additional member. Simply hit the new call button and choose a new participant just as you would do for a regular outgoing call. In this case, my colleague, Jan. With the simple and drop, Jan is invited to the conference. The system will now call him, tell him that he's being invited into a conference and ask him if he wants to participate. If he wants to join, he will automatically be put into the conference and appear in the active call section. Once in the conference room, the moderator has all the usual functionalities. For example, he can get the conference details, lock the conference, mute and unmute individuals or all participants or he can invite additional members. Let's invite an external participant. As you can see, this is being done just as before, hit the new call button and simply enter the number of the external person you want to join. This time, we choose to talk to the external person before joining him to the conference, and we can then decide to join him or not. Let's join this caller with the rest by simply dragging him on top of the existing conference. We then simply rejoin the conference and voila. As mentioned before, we can now mute and unmute everyone and so on. Also, note the green voice indicator on the right, so we can always see who is currently talking. That was Cloudya as we already have it now. But of course, we want to go further because telephony is growing together with other areas of communication and our customers are expanding their needs. The way people communicate with each other evolves over time. While the actual phone call still is the most important form of communication, as we've just seen in the polls, users more and more feel the need to also see each other and collaborate online. And that's exactly what we deliver. Let's take this regular Cloudya call. Now all we have to do is hit the video button. That's it. You do not have to switch apps or tools or start a video conference, just click the video button and there you are. And just as easily, you can collaborate and simply share your screen or only individual app windows. And of course, you can stop the collaboration anytime you want and go back to the video call. Naturally, this works both ways. Let's see how our colleague is sharing his screen now. And of course, we're not limited to the small screen, as you can switch to full-screen whenever we want. Video calls now behave just like audio calls. With Cloudya, a call is just a regular communication regardless of it being audio or video. Meet and share, which is what you're seeing right now, has been in public beta since September 2020 and was just recently officially launched in March. Now the next logical step is this needs to work in conferences as well. And guess what, that's exactly what we are delivering. I'll just give you a sneak preview on our exciting video conferencing feature, which is going to be launched later this year. We are now looking at an audio conference, just like the one I showed you earlier. And once again, we provide a natural and seamless integration by just clicking the video button. That's it. No more switching of apps and tools. No more, okay, guys. Let's stop here, and I'm going to send you a meeting request. This feature will work for conference rooms, dynamic ad hoc conferences, planned conferences. And of course, we will also allow external participants to join using just a regular web browser. So where does this put us on our UCaaS journey? We already delivered meet and share. Later this year, we will launch the video conferencing solution. After that, we will roll out video conferencing to all mobile apps and further enhances capabilities. We'll then optimize bandwidth usage in much more delivering a full blown, easy to use UCaaS solution with great functionality and perfect integration. Naturally, we will also provide tech capabilities. Speaking of chat and collaboration. We are well aware that there are already great collaboration and conferencing tools out there. Naturally, Microsoft Teams comes to mind. Since Teams is so important for many companies, we decided to fully integrate it into Cloudya. We were among the first ones to deliver a back-end based integration of Microsoft Teams into a cloud PBX solution. And what does that mean? It means that we transform MS Team's user session into a Cloudya extension with all functionality that Cloudya delivers. You can make and receive internal or external calls. And you can use all great Cloudya functionalities like interactive voice responses, automatic call distribution, and so much more. What's great and so special is that we do not only allow for full integration, we explicitly support hybrid environments. See how the call that we just made with Teams, reaches a regular Cloudya user in the Cloudya user interface. And of course, the other way around, let's call it Cloudya extension, which is connected to Team's account. Here we go. The great thing, there is no special treatment. Customers use Teams just a natural way as can Cloudya users continue to Cloudya or use both. And of course, Cloudya is not limited to the web app. Mobile clients work just as great as desktop phones or DECT systems. Many of our customers are faced with the challenge of using Teams for a small amount of white-collar workers, while the majority of employees do not have had that use collaboration. They need to reuse regular phones, DECT phones, but the company does not want to spend the extra money on the Team's license. Cloudya is your solution for this challenge. Cloudya integrates perfectly with Teams. As Klaus has pointed out, one of our growth pillars is the enhancement of our overall product offering. We want to enhance this offering beyond SIP and PBX business. I've already shown you how we are on track regarding our UCaaS offerings, but there is more. One of the business drivers are contact centers and more specifically, contact center as a service. Contact centers, offers offerings, allow you to greatly integrate the communication solution into customers' workflows while offering detailed analytics as well. With our NCC product, we are already addressing this market. So while I've been looking at Cloudya, let's now take a shot tour on NCC as well. In contact center applications, nearly everything is built on top of customer-centric workflows. This can be very simple as this example workflow shows. The call for precisely decided defines what happens on holidays, what happens with or within business hours, which aging groups take over the call at what stage in the workflow. And how do you later analyze this and optimize your workflows -- workforce. With NCC, we can answer these questions. The experienced members of our professional service department assist our customers in defining their needs and designing the perfect workflows. Workflows are not limited to voice communication. We also enable our customers to use other communication channels in their contact center solutions like e-mail or FAP or web chat. Doing so, we are delivering a true omnichannel solution. But let's start simple. NCC is also cloud and web based. And so all you need to do in order to get started is to simply go to start page and log in with your supervisor or agent credentials. Here we go. In this case, we login as a supervisor. After the login the supervisor can either act as an agent himself, manage campaigns, manages agent workforce or control the settings of these NCC tenants. On the top, agents and supervisors alike can easily see their current status and control the operating mode. For example, you can go on break, enter the dialer for outbound campaigns, switch to omnichannel mode and in neighbor of disabled things like web chat, WhatsApp or just log off as a client. Let's enter the agent view, which is where agents will usually work with. Here, we see the agent dashboard. It gives the agent a quick glance of his current status as well as overall stats like availability, number of people in the queues. Call history, detailed stats on the inbound channels and much more. Moreover, this agent is currently free and not handling a call or another request. So at the moment, this agent has no call, and there is no -- no one waiting in on one of his queues. But that's about to change. Look, what happens when a customer calls 1 of the service lines. Once the predefined call flow assigns the caller to queue, the corresponding agent gets notified bases on their status and skills. The agent immediately gets all the information. What number was called, who is calling? Is the number associated with the customer? Has the caller already entered additional information such as customer number or case number? What was the waiting time for the caller and much more? Let's take this call. My status immediately jumps to red, and I can interact with the customer. Moreover, I can see that meanwhile, there's an additional call on hold. Speaking of hold, of course, I can put a call on hold, make some inquiries, and resume the call at a later time. After solving the customer's problem and optionally making detailed call notes, I can hang up the call. I mentioned earlier that NCC is an omnichannel product. This means that not only does it support different communication channels in general, such as voice calls, WhatsApp or web chat. It enables the agents to optionally work on all of those channels at the same time. Let's see how this looks in case of a web chat. Let's assume a visitor comes to your web page and hits the chat button. Of course, you can also use chat workflows. This example, NCC asks the visitor to tell us whether or not he is already a customer or not. This one is not. So NCC's chatbot asks him for some basic information like, in this case, name and company name. Let's see how this looks from an agent's perspective. So we will show you the agent screen simultaneously. Please note that the agent so far is not handling the chat as there is no question yet. But look what happens once the visitor asks his first real question. Now the agent is notified of a new request or call, which he can take since he's free at this time. Once the agent takes the requests, he immediately sees all available information. In this case, the name and the company that was queried before, where the request was entered and, of course, the request itself. So the agent starts handling the request and chats with the customer. This can now go on for quite some time. The agent can, of course, use things like templates and integrations into individual systems like CRM or ticket systems. All of this is handled within one system. Everything can be integrated into the customer systems and workflows. And of course, you can get detailed statistics on the queues, agents, channels, and so on. After I'm finished handing this web request, I marked a 3 and can continue to assist our customers. But let's change from the duties of an agent to the possibilities of supervisors. As a supervisor, I can do a lot more. I can monitor my queues. And I can take a look at the status of all of my agents. I can also change things, switch status of my agents, for example, put them in break mode or switching back to voice duty. Or have them handle WhatsApp requests, for example. I can assign more people to outbound dialer campaigns, assign web chat duty and much more. What's a contact center solution without analytics and the beloved War Bot's. So of course, we offer very extensive analytics capabilities. Statistics can be put on a highly configurable War Bot and statistics are real time, of course. So supervisors can react if things change and queue handling needs adjustment. This all, what I'm showing you is, of course, just the tip of the iceberg. Unfortunately, I do not have enough time to really dive into this part of our product and show you more of its great capabilities at this time. As you can see, with NCC, we are already active in the CCaaS area with many satisfied customers. We are sure that this area has great potential, and therefore, we want to exploit this potential even further. We are going to address this potential using a 2-track strategy. For the smaller, sometimes more price-sensitive customers, we already offer great contact center functionality in our core product like automatic call distribution, call recording, computer telephony integration, and analytics with our end monitoring queues premium solution. For the bigger customers and/or the ones with more need for professional contact center functions and integrations, we will further enhance our NCC offering. This will include more focus on modern AI-driven functional features as well as enhancements in areas like faster project setup and ramp up times, powerful reporting, even more intelligent queue handling, better and deeper integration into customer systems and much more. In order to achieve this and address this market potential, we see great opportunities for M&A activities in this area. And with this, I will close my product demonstration and hand it back to you, Sabina.

Thank you, JP. As you can imagine, there are quite a lot of questions. So the first question, JP, for which premium solutions, do you see currently the highest demand apart from MS Teams?

Apart from MS Teams because that is actually one of the premium solutions that is right now really selling best and is really asked for quite a bit. But as I just mentioned, I believe that would be contact center solutions.

And the next question, you showed many PBX features. Do you really believe that PBX functions will be needed in the future?

Definitely, absolutely yes. Voice will stay at the core of the business communications. We've just seen this. We've seen this in many studies. We've seen this in the poll we've just had so the overall business communications package will grow. Voice is at the top of this and the PBX functions. We get this from partners. We get this from our customers is definitely needed.

And in your UCaaS strategy, you mentioned chat and video but not collaboration, so 5 documents will end for not offer collaboration services?

Most of the collaboration that we are seeing the need and then the price segment and the SME segment is really in terms of screen sharing, collaboratively working together on documents, showing things around, showing presentations, which is exactly what we are delivering with our solution right now in meet and share. And later on, with our video conferencing solution. We are not going into current state, we are not going into more extensive collaborative features like fired sharing or things like this. There are already perfect solutions for that out there, like Microsoft Teams, which we fully integrate with for that very reason.

And you just showed video conferencing. If it's not just a dummy, why do you only launch it in Q4?

I can assure you, it's not a dummy, and I know that because we're using it for 2 weeks now in our internal alpha tested NFON. So we are getting rid of other video conferencing tools and either our own dog food, as you say, as you say, we use this system. It's not a dummy. Now why are we delivering it in Q4? This needs to really be a perfect solution. It needs to be really perfect in terms of bandwidth usage, user experience, and so on, and so on. So that takes a little bit more time to really prepare for this and not give you out an alpha or beta to customers but a perfect user experience solution. So that's what's taking a little bit more time, and we are still working on really very easily being able to integrate external people in there by just meeting links in such lines, things like that. So that's why we are delivering this, or we tend to deliver this in Q4. Maybe it comes a bit earlier, but let's stick with Q4.

And can you remind us on ARPUs for the new solutions such as meet and share conferencing, video conferencing and chat versus just traditional offerings?

Yes. First of all, with the exception of meet and share, all of this has not been launched yet. So meet and share is part of our basic packaging, at least in the higher -- in the premium tariffs. There is no pricing release yet for the video conferencing tool. Some of the features will be integrated into our current offering. Some might be -- some UCaaS services like a very large conference and so on, might make it into a more premium tariff, we haven't really decided on that yet.

Okay. Thanks a lot, JP. We will have more questions later on. What good is the best and most promising market with the best product without sales. That is why we are now getting into the topic of sales. To begin, I'm very pleased to welcome my colleagues from Paris.

[Foreign Language] Thank you for having me.

You have a strong international business background in Europe, North and Latin America. So you have developed communication activities in these regions for around 25 years. About 2 years ago, you joined NFON. That means you brought with you your expertise in terms of channel business, sales development, and team management in the telecom area. So starting with France, Laurent, France seems to be a very promising market with a penetration rate of approximately 11% and a CAGR of approximately 25%. Could you give us a short overview of the French market?

Yes, of course. Yes, France is very promising country. Well, during this pandemic moment, surprisingly, the French market has been very active for the last 6-month. As many businesses are now looking into reducing our costs and modernizing their telecommunication solutions. A few key elements to share with you regarding France, cloud penetration is still very low, as you said, around 11%. But the cloud telephony is now fully trusted and accepted by the French market. And studies show a planned growth of around 5 million users by the end of 2025, which is an interesting potential for NFON [Technical Difficulty] and all the other players on the market as well. France is also the pan-European country, the European country that has the most subsidiaries in Europe and NFON being a pan-European country, this is -- this increases even more our growth potential.

So -- and who are the main competitors in this market?

Well, regarding competition, if we talk only about competitors who own and develop a cloud telephony solution, I would say we have around 10. The most active ones being in the French players, like the incumbents as well as OpenIP and Aircall. But we now also Phase 3 CX as well as RingCentral. But the particular issue of the French market is that there are many resellers who sell cloud telephony solutions, 100% branded with their own names and logos instead of pushing the Editor's name. So they can also be considered as competitors as well. So this would give us about a few hundred competitors in total. So that's quite a busy market. But nevertheless, with the potential France has in years to come, there's plenty of room for all of us.

And how -- do you evaluate our go-to-market?

Well to their needs. But we also have found out a more and more large multisite French companies also have a strong wish to migrate to [ cloud telephony. ] And our partners are very active in that field. Our first large customer in France, in addition to Maxi Zoo was the [ retail chain ] [indiscernible] with more than 90 sites and 800 users. And we are currently finalizing [Technical Difficulty] 2 other similar projects. But to get back to our go-to-market and your question, when we started in phone France, there was no doubt at all that the right way to offer solutions was through the wholesale ecosystem. Wholesale partners [Technical Difficulty] finally, some of our partners also have a strong vertical expertise, like in the hospitality market, that is one of the largest in the world in France as well as for contact centers. And thanks to this type of wholesale partnership, it allows us to offer effort to the end user, the type of service that is in our DNA, which is simplicity, reactivity, proximity, and flexibility.

Thanks, Laurent. And now we changed to Italy. Hello, [Technical Difficulty].

Hello. Good afternoon, everyone.

Thank you. Marco has been Managing Director of our Italian subsidiary since 2019 but have been in the telecom sector for many years. He started his career at Alcatel Italia, Avaya, and Nortel. Before joining NFON, he spent many years at Alcatel-Lucent Enterprise. Marco my questions to you. Italy seems to be quite new in the area of cloud communication with a penetration rate of 7%, expecting to be at 17% in 5 years. Could you give us a short overview of the Italian market as well?

Yes. I mean, sure. As I say, the Italian cloud telephony market is still in the early stage, but it's moving fast now. Many companies have realized that cloud is the solution to easily enable new services and that is flexible and convenient now. I'm actually very confident on the transformation also because the cloud adoption is quite common in the local market. IT services, as e-mail, CRM, back half, office productivity are all using the cloud form since many years. It's also important to mention that the various COVID lockdown said, yes, created some uncertainty. But they have accelerated the knowledge and adoption of cloud telephony and unified communication in the country and still a strong in the agency that penetration rate is now accelerating.

And Marco who are the main competitors in the Italian market?

Actually [Technical Difficulty] the Italian market is a bit [Technical Difficulty]. So the areas, I mean, they are all big companies, beats in personal. They offer rigid contracts, minimum duration, and penalties for advanced [ termination. ] On the other side, the [indiscernible] telephony service providers are small companies, they all said, yes, cheap solutions, but they have scarce resources, no ability at all to provide carrier class quality reliability. So basically, we have a quite unique position because we can provide Cavell class service that are actually used by more than 40,000 customers, as you all know, but we are very customer-driven and flexible, like a small organization. So we feel very well in the local market.

Okay. And how do you evaluate the go-to-market approach in Italy?

Yes. We decided to approach the market with a very flexible go to market. And I can tell you that NFON is a very flexible company on that. So we have built a variety of the different contract opportunities in order to offer all possibilities to work with us. So in the couple of years, we have built, and we have some content [Technical Difficulty] with white label cans, but also wholesale partners, [Technical Difficulty] commission-based partners and distributors. So thanks to our flexibility, we are able to reach new customers via multiple roles and able to onboard any type of local results.

Thank you, Marco, for this time. Klaus, before we are talking about our partner network, would you like to describe the distribution channels we use?

Sure. So basically, there's 3 categories of partners. We distinguish and we work with, 1 is the classical dealer implementation partner working based on a commission that we have very many of and who are locally supporting their customers. Then we have so-called whole sellers that either sell us as a white label solution like putting their own -- embedding it into their own offering or not, sometimes with airtime, sometimes without, that's the second category. And the third category is actually the distributors who themselves have a large network of smaller partners, they're helping to orchestrate, and we are happy to work with all 3 types of partners.

Okay. Thank you. Where does NFON see the key markets and biggest growth opportunities, Klaus?

I don't know if that's a geographic question or a segment question. But in terms of segment, obviously, the SME market is the largest customer segment, still has enormous growth ahead. So this is the largest potential that we are addressing across all our geographies. The Enterprise segment, as we talked about, is obviously additional addressable market. And across Europe, I would estimate probably adds another -- increases the addressable space by another 1/3. Obviously, it varies widely by country because the relationship, the ratio between enterprise and mid-market is very different in different European countries. But across the board, it's maybe like a good rule of thumb.

And so Laurent, you mentioned for France, the wholesale partners. Could you say a little bit more about the carriers in France markets?

Well, the carriers you have a few carriers who are really dynamic, but it's mostly about the wholesale environment here in France. You have as carrier you have incumbents. You also have long-term history carriers for providing minutes. But it's always in France about the wholesale model that is really strong. Because the wholesale in France not only want to gain expertise, but they also intend to continue to have a direct total interaction with our customers. So they will come to us as a carrier where we can offer minutes to them, okay, as well as a telecommunication solution. So they want the complete package. And this is where they have a full interest in working and partnering with us because we're able to offer [Technical Difficulty]

[Technical Difficulty] development in Italy last year, especially?

Yes. Well, good or best, as I'm showing in all countries worldwide. I mean, the best story is that the local market, local financial market has been impacted for sure. Some companies are, especially the mid and large initiations are taking more time to take decisions and to start the digital transformation. On the other side, the lockdowns had given the chance to many companies to realize that they cannot continue their business without cloud services. Cloud is the new magic elements that enable companies to do their business.

Thanks. I think we could talk a lot longer and answer a lot more questions, but unfortunately, I have to interrupt at this point. Laurent and Marco, thanks a lot for your time and the lively discussion for now, I wish you a nice evening and see you soon.

[Foreign Language]

[Foreign Language]

Bye. Bye [indiscernible]. Bye.

Bye guys.

[Foreign Language] We are coming to the last part of our Capital Markets Day and thus to our talk with the management team. But before we enter the last topic of the agenda, I would invite you once again to a small survey. Markets are changing rapidly. New trends appear again. We have today but the all-important question is, will voice centric business communication still exists in the future. [Presentation]

We have now the results of our last survey, and luckily, the results differs not from our view on this question. So 80.2% said only over-the-top content, no service provider will be involved and 85 points -- 84.6%, sorry, said OTT and voice, a service provider will be involved. This fits perfectly to our growth strategy 2024, where we want to grow into the UCaaS and CCaaS area. Is this the reason, Klaus, why we recently increased our capital?

Yes. So first of all, I'm happy the results turned out that way. If it hadn't, I would probably have to get up now. But yes, we agree with that assessment. We also agree with there's a certain portion that might go OTT only. But there will just be a minority of the businesses for that. It will work. Yes, obviously, there is -- that's a reason why we raised the capital because we see that this is an opportunity do you want to pursue, and we need to build the right product -- build out the right product portfolio for that market to -- that's developing. And obviously, we need to take our strength, our partner network along on this journey and like go big.

Thanks. So there are a lot of questions for us. The first question come. What makes competition easier in Poland than in France, for example, and I think Klaus, this is also a question for you.

So the quick answer, less competitors.

So can you quantify the market or business, so I can read the question. The opportunities in the Enterprise segment compared to the one you're addressing today.

That actually is what I just mentioned before. It varies widely by European country. For example, like we take Switzerland, have a large enterprise segment, small, mid-market, U.K. as a large mid-market, Enterprise segment, not so big. So -- but overall, across the Europe, we would think that probably like around 1/3 would be the size of the enterprise that would come on top of our addressable market now.

So I think this is a question for Yang Yu. We've learned that partners are core to success. What do you plan to increase the numbers of partners?

I mean, I think we are not talking only about the number of partners. We are especially also talking about the quality of partners. And I mean, we have a lot of measures. As I said, we already have like 2,700 partners already. And we plan a number of measures. First of all, we're going to rework our partner program. We are going to rework our partner acquisition strategy. In the end, we have to have like a comprehensive offering, like the best offering in Europe for the partners. And that's what we try to achieve.

Thanks. So yes, now 1 question or 2 questions for you, Petra. So you have stated your intention to prioritize growth at present. When do you plan or when do we plan for NFON to reach profitability?

So profitability, it seems to be very close as we have proven from last year that we can be profitable almost at any time. If we reduce and cut marketing spend, for example, then we can be profitable already now. But as we stated, we want to be profitable now that it's not our goal to be profitable time being -- for the time being, not on midterm, we want to gain more market share than harvest that and be very profitable in -- after midterm.

Okay. And then JP, one question for you, I think. NFON has been a growth-focused company for years. Why do you increase marketing and R&D?

I can take it. I can try to say a lot why we are increasing marketing, but that I believe would be better answered by. But in terms of R&D spending, nowadays, you basically can't really spend enough on it. Can you? We have had a tremendous luck of having brilliant and great engineers in the first years but now what we see is definitely -- there are so many more things that we want to do and want to present. We want to enhance our products so much. I've showed you a lot about earlier in terms of UCaaS strategy collaboration. But also contact centers. So there's so much to do. So definitely, that is something where you, as a tech company, as a software-driven company that we are, you simply need to invest into this. This is basically -- this is our -- one of our most important assets, which is definitely why we need to increase this to get more things done and improve quality, improve things like UI/UX and features.

So -- and this was, I think, 2-part question. We can also put the second part to you, Jan.

Okay. Thank you. Yes, I could answer whether you can't spend enough on marketing. Can you? I'm sure you can. But I mean, look, what we did, I think, also over the last years, is we invested already quite heavily in marketing, especially, I think, in the German market, but also very much in brand awareness and so on. And last year, due to the pandemic and the situation, we also decided to cut down our marketing budget, reduce spending's, and to see where we -- how the situation develops. And I think now we also took the chance to a little bit refocus on what we do. So we will focus even more on channel, on channel marketing, on growing with our partners. On growing our partner network, and I think that's the right way to go.

And Petra, one question for you, which kind of growth rates do you think you can achieve by your measures or the measures we discuss here going forward?

I think we should answer it. I've already seen another question from one of our investors, which is that Cavell Group forecasts 20% to 25% CAGR over the next years. But we've guided a little bit more cautious, 15% to 17% this year. So I think we can answer this in a combination because we definitely want to meet or achieve the Cavell's forecast and want to grow in this area. And we want to improve our growth, but it needs some time, not only for marketing measures and investment in product needs it's time to convert into seats, but the growth over years to decent portion dependent on last year's success on the full year effect of seats we've gained last year and due to COVID and a little bit cautious investment, as Klaus said, we haven't gained so much additional seats last year. So it will take some time to accelerate the growth, but we are very confident that we will meet the CAGRs, Cavell forecasted or, as I said, overachieve them.

So 1 other question probably for you, Klaus. We do see other providers going into larger enterprise markets. We are more or less -- so it seems the question focus on SMB market or the SME markets.

Okay. So I think that is probably what -- I'm not sure if I understand the question completely. Because I think it's what I've mentioned 2 or 3 times that, yes, our core market is the SME market. Yes, we like to scale up to the enterprise market. We're actually doing now already, especially on the small enterprise market. And we easily scale up where our platform can do that in a scalable way. Where we shy away from serving larger enterprise customer (which we are already doing in individual cases). We don't want to do tailor -- the tailor-made individual solution business. We want to build our tech platform that actually serves all customers across all segments, across all geographies, because that's where the economies of scale lie. We don't want to do a one off-system integration business. I think that's the difference. But as I said, like our platform has grown so powerful and our plans are to continue that way. That more and more enterprise customers can easily fit into that.

Thanks. So we are now coming to the end of our event. I'm very pleased that I have -- you have participated actively. And with such interest, I would also like to thank my colleagues, our guests, and all those who have worked behind the scenes to make it possible for us to come together here today. With that, I wish everyone a pleasant evening and look forward to seeing you again soon. Bye-bye.

Goodbye.

Thank you. Bye.

Thank you.