NFON AG (NFN) Earnings Call Transcript & Summary

Ladies and gentlemen, shareholders, analysts, partners, good afternoon, and thank you for joining us at NFON's Capital Market Day 2024. My name is Friederike Thyssen, VP, Investor Relations, Sustainability and Investor Relations. Today is an exciting milestone for us as our entire new management team comes together for the first time to discuss our vision for the future. We are eager to share our strategic directions, the innovative steps that we are taking in the fast-moving world of cloud-based business communication. We'll be exploring key questions such as how will our strategy shape the future of NFON, what innovations are we driving to stay ahead in this dynamic industry. Let me introduce you to the team on the stage today. Patrik Heider, our Chief Executive Officer; Andreas Wesselmann, our Chief Technology Officer; Markus Krammer, Chief Product Officer; and Merano Mettbach, Chief Revenue Officer. Our agenda Patrik Heider will kick things off by discussing the future of NFON, cover market trends and share our plans of our sustainable profitable growth. Andreas Wesselmann will then take us through the innovation transformation journey, where he'll explain how we are advancing our product portfolio and technology. After a short coffee break at around 4:00 p.m, will reconvene for a panel discussion with our leadership team. This will provide deeper insights into market trends, products and sales strategy. Finally, Patrik will present our financials and midterm guidance before we open the floor for a Q&A session. Please feel free to submit questions into the Q&A section in the Zoom stream and we'll answer them at the end. Don't forget to identify yourself when asking questions. We'll wrap things up with closing remarks of Patrik reflecting on today's discussion. Before we begin, please note our safe harbor statement. And with that, I'll now hand over to Patrik. Have fun.

Thank you very much, Friederike. My name is Patrik I'm still here in person, not as a bot version. So hopefully, that remains like this. I feel extremely honored with you together with my management team, and the NFON management team to talk about our future ambitions. So let's get started. Let's talk first about our markets and the potential in our markets. And the headline is very short. We are talking about huge potential in our markets and a fast-growing market. So let me start with some figures, key figures about the worldwide market and also the markets we are in. So there is also market in markets research, which is reflecting an overall growth of 20% year-on-year and a market size of USD 140 billion in 2027 when it comes to overall global unified communication market. Also, Gartner is predicting in 2025 and 1 million new users in terms of cloud-based unified communication tools. There is also the part of artificial intelligence which is still relatively difficult to get insights and data about this one, but what we can reflect that there is already huge investments into this market. EUR 110 billion in 2024, goes already directly to artificial intelligence. Highly interesting is also that companies are positively -- with a positive mindset when it comes to increase in customer satisfaction with help of artificial intelligent tools, 73% of the companies are reporting an increase in customer satisfaction. What we also have, not only after the corona pandemic is a total trend of further urbanization and that means communication tools are incredibly important for the future when it comes to cooperation and communication in the business world, 68% of the global population will live in urban areas and that is very important to have proper efficiency and communication tools. So that means NFON is in a market which we are well positioned. We come to this one later. And obviously, it's also driven like every other industry, also in terms of AI tools and artificial intelligence. Talking about the growing cloud communication penetration, and you see different areas in the world. And unfortunately, as a German, I can be self-critical as always to Germans, we are in the list very last ranked again. Only 17% are penetrated already to the cloud when it comes to business communication tools. Also here, we have clear surveys saying that until 2028, 88% are going to be transformed to the cloud. Already like we know it from the U.K., there is a higher matureness when it comes to cloud penetration, also the U.S. But overall, we can say that we have huge potential to bring really the cloud communications tools into the cloud. I don't want to go through every trend, but especially one trend is very important for us, which is also influencing highly our future growth and future strategy, and that's the part of AI integration. It's not only on LinkedIn and other marketing worlds saying and talking about artificial intelligence. Now it's the time to already embed features and also efficiency tools into our tool set, and we come to this one later. This slide, you might know, when you know NFON, and I thought it's a very interesting part, this slide as a kind of preinformation is not at all with artificial intelligence data. It's only the pure world of our business communication tools. It's segmented into 4 different parts. Its segment in the blue part into UCaaS, Unified Communication as a service with the yellow part together, the blue part is reflecting our home turf, and that's the voice-centric part. The yellow part is the video-centric collaboration part where players like, for example, our partner, MS Teams is also in. Then there is the green part of the so-called CCaaS market, customer center as a service. We are also there represented with our brand Daktela with our tech partnership. And there's the red part where NFON is not represented. There is a player like, for example, Twilio and those -- this is the part of CPaaS World, Communication Platform as a Service. Everyone is heading in the kind of into the middle in the blue one, where we offer in the end of the day a platform where we can address most of those features in the different areas. You also see the different growth path. For example, you see 70% of year-on-year growth in the world of Contact Center. It needs to be mentioned that, obviously, the Contact Center world as a total addressable market is much smaller than the UCaaS market. And the UCaaS market itself is still growing double digit in the voice-centric part, but we also see that it's going down to high single digit or mid-single digit. So that means overall growth in that market, again, without artificial intelligence is around about 10% year-on-year. On the next slide, you obviously, as I already mentioned, it's very difficult to get market data, but we thought it's very interesting to add now the view on artificial intelligence features into our business communication world too. On the left-hand side, you see data of our newly acquired company called botario, which is impressive growth, still on a small scale, but I think it's worth to mention that they are growing 40% year-on-year, and it's expected to remain the same. On the right-hand side, we want to give you a little bit of flavor of how the market is growing in general and what activities are going on. You see, for example, a lot of funding rounds and investments like, for example, Cognigy, they closed EUR 100 million funding round. And also Databricks, as for example, they went into EUR 1 billion Series G investment. And also, we do see that now the whole economy is also understanding, also in the public sector that AI is contributing to the GDPR and all other economy health of each country. So to make it short, it is a very attractive market. It's fast-growing. And obviously, we need to be also fast and innovative and this is what we are working on. We want to give you the impression now with our future plans that we grab as most as possible from those potential. Where do we stand at NFON. So first of all, I want to give you a little bit short overview, we are definitely one of the market leader when it comes to Germany. We have 665 seats out there. We have more than 3,000 loyal partners. We have more than 55,000 customers, 400 engaged employees are working with us. We have a high interesting and attractive recurring revenue share with more than 90%. And our churn is relatively slow, it's 0.5% on a monthly base, meaning in the average of the industry. We are in active markets, we are clearly seeing a German player with some foreign activities. We come to this one later. That could be also a future growth opportunity. We're having 80% roundabout in the German business, 10% in Austria, 10% in U.K. and a little bit in Italy and other markets. Our product portfolio is more or less categorized into voice-centric business communication. We have the enablement session -- category with, for example, the SIP trunk. We have the Contact Center, we have the Daktela solution when it comes to contact center solutions. We are also working hard and very successful, and we are well known for that in the integration part. And we are also having great partner with botario, the newly acquired company and also with [AES] together when it comes to voice recording. On the next slide, just as a reminder, about which scope we are talking, we thought it's worth to mention again whom we own and what the group of NFON means. And here, you see all the companies which we own 100%, there is a smaller investment also into Meetecho that was a voice collaboration kernel we acquired in 2022, but with a minority share. On the next slide, you definitely see the success story of NFON. I mean, over the years, NFON was founded in 2007, over the year, we have definitely the pioneer in Cloud PBX solution, there was a strong growth. But what you also see and you need to fight hard in order to get to the next growth story that from 2019, you already see a shrinking growth rate. Still growth but definitely, you see a shrinking growth rate. Also, what we try to do, but here also the market data was a bit difficult and tricky, definitely in 2021, 2022, you already saw that we are below market growth. And that's a dangerous sign where management definitely needs to do something in order to get to the next growth stage. And this is why we call the year of 2024 clearly communicated also to the financial market, a transformation year. But we wanted to show that very open that you also see why management is talking about the transformation. What are we doing in transformation? In the transformation, obviously, you need to think two folded. You need to think external and you need to think internal. In the external world, definitely, you need to figure out and really make an analysis where is future growth potential. I already mentioned in the part where I explained the different categories of business communication cloud systems, that the UCaaS market is still attractive. It will remain the organic engine for the business for the next couple of years, but will definitely not be double-digit growth engine for the future. So what we did is we analyzed the market. We saw the potential of AI opportunities and then obviously, we were very happy, I think, 3 weeks ago to already act on this with the acquisition of Botario. And there will be future opportunities. So at the moment, of course, we are working hard to get Botario integrated to make it successful. But in the future, we need to think like that if a growth engine or growth momentum is not given anymore, obviously, we always need to think in external opportunities. Internally, we also mentioned and already communicated that we have signaled also to the employees that we need to work hard on operational excellence. That was after 70 years of strong growth, needed now in different areas. Either you take the integration of DTS, which was an acquisition in 2021, you see the modernization into the tech base, you also need to streamline your system infrastructure, and this is what exactly we are doing. And I'm very confident that until the year-end, most of those things we can accomplish. So what we did is we just initiated and analyzed together with the management team, the situation, we are operating now, and then we want to outperform, obviously, also in terms of operational excellence. This is the year of our transformation. Externally, new growth potential identified. Internally, we are working hard on operational excellence. How we will leap forward because there's also a year after 2024 and today is the day where we want to give you ideas about 2024, until 2027, 2028, so the next couple of years. And obviously, we also need to work hard to address that to our employees because they are the most important part, our IP is written by our employees. So definitely, what we have as an ambition and Andreas, our new CTO, he will dive in deeper also together with Markus from the product side, we want to have the ambition to become the leading provider of AI-based business communication solutions. You already see a new part in this ambition. This is definitely the AI part. And the key drivers for tech and software company, you don't see something highly sophisticated on that slide, it is always about market and customers, and product and technology. Those are the most important parts we need to bring together to get customer centricity, but also product-driven parts into our business. We are also working not only because we are a public listed company, but it's also important for our employees on the ESG part. And here, it needs to be addressed that the most important parts are the people and culture part. And also the governance part. And people and culture, in such a young company, small company, relatively agile company like us is all about how to educate and how to attractive the customer -- and our employees for the future. That all needs and here my CFO [Indiscernible] maybe out, but that all leads to tangible results. It needs to be come to tangible results for you, dear shareholders, but also for us, as a company in order to get the proof that we are successful. And those tangible results are clearly communicated that we have the ambition to really drive for the future years. EBITDA growth is bigger than revenue growth and own revenue growth is bigger than market growth. That means we are going to win market shares and doing more profitable than the years before. Talking a little bit about these core elements about innovative product development and sales excellence, and that's the main topic of today. And this is what we need to drive in order to drive the business sustainably forward is in the part of innovative product development, we want to inhale into the company a mixture of build and acquire. Obviously, we were happy and also proud that 2 or 3 weeks ago, we already managed the acquired part. But I think it's always a mixture in technology company of both. You need to get your own things done, but you also need to think about how to acquire business because sometimes go-to-market procedures are much faster when you acquire business. Obviously, you need to have a good idea how to integrate that acquired business into your organic portfolio. And also what I call is one of the other 2 most important parts is the sales excellence. And here, we really have -- and Merano Mettbach, our CRO will talk about this also in the panel round. We also have many things to improve. And I see it really positively that we also can increase organic growth already from doing better in sales excellence. We need to get that done in Germany first with the highest focus because 80% of the revenues come from Germany. And then obviously, also talking about European markets, we want to do the European markets we are in, that's Austria, that's U.K., that's South of Europe, mainly Italy, Spain and France. First successful because thinking -- before thinking about our market, other markets. If we base all those initiatives on a fundamental strong operational excellence, I think this will be our winning strategy for the future. But now for the moment, it's enough from my side because we are a tech company, and in tech companies, the most important part is technology. And this is why I feel now honored and also proud to introduce to you, Andreas Wesselmann. And he will talk about the future and that will be great stuff I can already inform you. Welcome, Andreas.

Thanks a lot Patrik. And warm welcome also from my side. My name is Andreas Wesselmann and I'm new at NFONs, starting on January this year. And some of you might have heard about me or heard me at the Annual Shareholder Conference, but nevertheless, let me take a brief journey through my professional life before I get started. I spent before I joined NFON in the last 20 years at SAP in a variety of global leadership development roles, always a software, different kind of products. And I had pleasure to all 3, 4 years, do something new through the whole technology and product stack. So from databases to cloud platforms and then to user interfaces, et cetera, in combination always with applications in the data space, so data warehousing, analytics, data orchestration and data intelligence. And so it's quite natural that when the GPT came up in November '22, so this whole motion of generative AI, I was very passionate about that, and I was believing that this will really, really create an impact. And that's one of the core reasons why I decided to join NFON in my role as CTO and Management Board member in January, because this is an industry where the generative AI definitely will be of importance and definitely will also create an impact in the years to come. Privately, I live close to Heidelberg. I'm married. I have 2 kids, 2 boys, 18 and 20 years old. That's enough about myself for today. Now let's jump into the transformation or the innovation transformation journey of NFON. Let me maybe start with the AI technology and what is the impact of AI technology in transforming products and processes. And I think first observation is clearly that there is a lot of money on the table. So if you take the investments that Microsoft did in open AI or anyone else, it shows there is a significant investment that is going in there. And why is that? If you simply, it's about 2 dimensions. On the one hand side, there is a lot of innovation increasing the top line and at the same, there are a lot of opportunities to really get the efficiencies and then the cost down, so you have a lot of space to invest, and innovations on the one hand side and then also to have a stronger growth profile going forward. And if you take the examples like you see here from Amazon, CEO, what they safe is of significant amount. If you take the adoption, you look at the users, if you see how you also in personal life and individuals use the technology just to improve their personal efficiency -- you see that this already reached all consumers and definitely also all businesses. So how does that influence the NFON strategy, so we see this coming from different dimensions. So the one dimension is obviously, and I will talk about that in more detail later on this portfolio strategy, to then the solutions, the innovative solution portfolio, creating then customer value. This is absolutely key for us, et cetera, and then leading to profitable growth from that dimension. And if you come then from the other perspective, you need to enable the whole company. So it's not just a tech topic for some nerds, if you want. So we decided to enable the whole organization, the people and the processes to enable the people with learning and also take a look at our internal processes and try to simplify and automate those. So it's a quite comprehensive look on how we see things. And another dimension is obviously speed. So you have to be fast there. You have to be fast out there. And therefore, it was for us a great pleasure that we were able to announce the acquisition of botario a few weeks ago because this is an exact fit of what we strive to do. So we come more from the voice-centric part and edit already some AI capabilities and want to grow there whereas botario comes from a very strong AI asset package across all dimensions, portfolio, people, knowledge, et cetera, and moves and want to move in the voice-centric thing because they clearly see that this is a combination. And so -- it's an absolutely perfect fit on how this went together. So their mission on automate or communication is exactly what helps us and with the power of 16 software developers and an experience of over 5 years with productive installation at customers without a dedicated sales force with recommendations of customers that were satisfied with that solution also manifests in their growth profile. So to have a start-up in that stage, that runs over EUR 2 million in revenues with a profitability of over 30 percentage points is certainly something that you do not find too often. So it's a perfect fit also with the whole management team and the development team, so [Indiscernible] and the product portfolio, as we see it on the on the right-hand side. As I said, for us, the acceleration is important, but it's also important that we take a holistic look and perspective about the whole company. So that means we need to think about new things and of changes throughout the company. So it touches the way we work. It touches how we focus and want to create customer value, how we drive innovation. It requires that we take a look at processes and reflect how to standardize and simplify them. And that also means we need to challenge existing processes as they are. We need also to think how to commercialize that. So how to explore also new growth opportunities and strengthen existing relationships to partners and customers and that we should be more open than in the past also to play the partner game in a variety also of technology partnerships as we go. So it's a thinking of continuous innovation, and it's not only about product and technology. It's also about the way, and you will see this in some demos later on, on how we approach customers and partners, how we do sales and support, et cetera, how we enable the organization with learning, how we support our internal colleagues, for example, in support to leverage that technology to do a more productive and job that makes more fun and does not as always to answer the same questions. And so we decided to focus on a set of key initiatives to drive that forward, so that we really reflect everything along the customer life cycle and benefits. So this is very important for us that we do this cross company as an enablement and involvement of all employees. And that we strive for productive valuable customer usage as fast as possible. And if you have such a holistic perspective and you want to drive that forward, it's our great pleasure that we could announce yesterday that Jana Richter will join us to guide the AI transformation at NFON. So that she holistically can drive that forward across the whole company. Jana comes with a great track record in the enterprise business. She joins us from SAP and the last 5 years, she was really very, very deep into the AI topic, focusing on the application of AI towards application with a great user experience. And this is exactly what we missed and what we want to drive forward. And I think in the combination with Jana coming in, plus the acquisition on botario, we are perfectly set up to drive things forward fast in the right direction. If you take a look at our existing product portfolio, you have the well-known things along the SIP trunk about the core cloud telephony and our Contact Center hub solution, as Patrik already mentioned. But it's also worthwhile to mention that already today, we have offerings how AI augments our existing product portfolio. For example, in the Contact Center hub solution, we have capabilities of voicebot, chatbot, et cetera, et cetera, that we stepwise introduced to the market. We have in the area of compliance recording and our partnership with [Indiscernible] capabilities to use AI also to automate the compliance questions that especially we have in regulated industries. But there is another dimension we call integrations, and that's also very, very keen and very important to scale out because we strive for integration in other solutions and want to integrate other solutions in our portfolio. And this just helps us to grow faster and to grow in more dimensions. And how we do this, for example, with an integration in Microsoft teams, you will also see later in the demo. And then, of course, if you have that picture the key crown jewel of botario coming in, will really help us not only have a dedicated portfolio in that space, where we can address different customer segments and different industries, but also in the combination and synergies with our existing portfolio where you will get some ideas in a second. So this is high level, the plan, how we stepwise want to introduce that augment existing portfolio stepwise, focus on the existing portfolio for scale and more openness and then have a dedicated extension of AI capabilities that gives us a holistic picture and approach on how to drive forward AI-based business communication solutions in the market. And what I would like to do now is maybe what you would not expect. We will show you some sneak peek and previews from our labs about some concrete use cases that we thought about outside the typical things like that you do a summary of your voice mail or that you manage inbound calling, et cetera, but really with a focus on the customer value chain experience. What do I mean with that? I mean with that, that the customer journey starts with a certain need of a solution. So I'm interested in a solution, can you help me? Today, it takes a while from the first interaction until you have the first productive deployment. This is an aspect we worked on. And then, of course, if you have the decision, you want to have the value fast. So you want to have a fast solution deployment as you go or at least a trial version where you can immediately start and if you then have deployed a solution, the next question is, of course, how can I help myself in self-troubleshooting and ask questions and not always for everything you need to call the support line or ask someone that has the according experience. And then you can think about deepening the customer relationship based on these assets. So what does that mean? As I said, sneak peek into the future of NFON, I cannot tell you exactly what when things of what I show you in a second will be available. But I can promise you that it's not a thing that comes in 2 or 3 years, it's something we already started to work on from the beginning of the year, and we will continue to work on, and we are very confident that through the course of next year, stepwise, you will see this in production. Let's start maybe with an idea of how AI can help you to really tailor your solution demand. So if you take a look at that video, you are a company and you just start with an interest that I would like to have a cloud telephony solution. And if you have this, you interact with a bot in the natural language speaking we leverage generative AI capabilities there, just to nail down and make it concrete what you're interested in. So you share the size of your company, you share what business you are in, you say, "Yes, I'm not in -- I have an existing solution. I'm 50 employees." And this is the name of my company and then it asks some other question just to detail down your demands and we trained it exactly in that way based on the experiences that we as a company have and our partners have. And then it guides you through a concrete suggestion of a product that is exactly tailor-made for what you articulated and what you want. And you see if it's getting precise after all the question, it comes more to a guided methodology so that you really see very concrete how it looks like. So you see on the right-hand side, then a structured insight about a concrete offering based on a real existing product catalog and pricing scheme that we have on our systems. And this was not a question of 1 or 2 minutes. It was not a question of days and weeks, et cetera. And this might give you the power. And if you press here, then the go button, then you want the solution to be deployed. This is one thing and it not only helps us and our customers, but of course, also our partners going forward. So that is one idea, and you can easily imagine with the productive platform of botario that we now have available that the productization is now far easier than to do this all on our own. The second thing I would like to share with you and show you is that how the technology can help you for the solution adoption experience. And here, we take an example where we integrate parts of our portfolio, in that case, the SIP trunk into a third-party offering. In that case, the Microsoft Teams voice solution. And also here, think it from the experience and customer value perspective. Obviously, you start in a well-known environment. In that case, it's the administration environment of Microsoft teams. And then, of course, your preference choice is NFON and off you go, you end directly in our center. You can start a free trial. If you have a free trial, you just enter your basic information. We also think about ways how to automate that. And if you have done that, you say, I'm interested. I want to go for a trial version. What then happens, we serve you with, in that case, 5 numbers that you will be assigned for free. We deploy in the background automatically the solution and connecting it to the existing teams voice. We provide technically a SIP trunk for you. And because you already have the numbers available, you can easily map that to your existing accounts. So that means immediately now you are able to start working. So you can assign, as I said, the numbers and to the users. And with this assignment, you can start to make calls. So you can use it productively. Yes, you still run in a trial phase, which means for the trial phase, in that case, 14 days. It's not that you pay something, you have some limitations, but exactly you can do and already start and experience the solution. And based on that, of course, we are convinced that you are then satisfied with the solution offering and then you decide to buy. So what also then automatically happens is that after your trial period ends, that you then get a reasonable offer based on the pricing and how you are, so to speak, as a customer and what is your partner, et cetera, and then get the offering, you do a purchase with a one click, you get a price point, you click and then off you go, which means you use exactly the same instance that you have currently deployed and that you started to work on. The only difference is now completely productively usable. You can add new numbers and off you go. And this is an example of a solution experience on how we would like and love the new NFON to be. This is a second example. I would continue with a third example, and this is more about after the solution deployment, how it eases, so how the technology helps you to ease self-reliant solution finding. Because you typically have the questions, you go on vacation, what is about the routing of my number or I want to use my private phone and my vacation, how can I set this up and you do this once, twice in a year, and you don't remember all the details or there might be another use case. You're just interested, I heard about this interesting contact center hub solution at NFON. So what is the key pitch? What is it about? And I would like to show how we think and what we [Indiscernible] how the technology, which is a multimodal so-called technology, so it can handle text, it can handle speech and video and images can help you also with this. So if we play the video now, again, the starting point is that you are in a situation and ask for help, I want to go to vacation and then I want to use my private home, but you don't remember how you really want to -- how you really can set this up for the purposes in your default profile? So you see, again, same methodology. We integrate the AI systems and bots in customer service centers like in that case, and you ask a question, again, you can talk, you can write. And this time, the answer is not just a text or an answer. It just gives you the screen shots out of our latest technical documentation. So in our model and enhancements, what we did in the last month is we put all our technical documentation and background in, so that you now really see it as a picture, and you can put your phone or your desktop device and then click, click, click and do the same thing and immediately you solve your problem. No call to any support assistant, no anger because you don't find it in your documentation, you just ask and off you go. If you have questions about give me a pitch about the Contact Center portfolio, we can answer this with videos. So what we did, we took as input all the publicly available videos that we have, that we ourselves created, for example, on our product portfolio and we can match it exactly to the pitch, for example, of Contact Center hub in that case, so that you really can see and directly get this. This is a support and also a pipelining for our sales colleagues and presales colleagues because then the customers come already with a pre knowledge, and we can directly work with them on their demands and on their questions. This is a third dimension. And I would like to end up with something we -- to be frank, just put together in the last 2 weeks after the botario acquisition, but which also shows the great dynamic between the different development teams, how can we combine this with the botario portfolio? So one thing before I forget this is already clear. If you saw the first 3 demonstrations that we did in our internal labs it's crystal clear that now with the acquisition of botario, it will immensely help us to speed up and accelerate the go-to-market and the productive usage of those things that such an obvious best fit that we will definitely leverage on that. This puts in another dimension. This puts in the dimension of deeper customer insights. What do I mean with that? Think about you have -- and again, a little video. You have on the right-hand side, we just plugged in our NFON bot, if you want. You have questions. Again, how do I -- Yes. In that case, I'm a bit annoyed. I want to do the same stuff. As I always, I want to forward my calls. How do I do this? And we put on the left-hand side, more administrator panel where you really see what's happening. So you see that in real time, you can do summarization of the answers and of the things you get in real time if this is allowed and confirmed a sentiment analysis and you get a categorization of the things and think about that in customer tickets or other dimension. In this case, it is about getting an answer. And if you provide the customers, in that case, an immediate answer about the value and share how this is done and where exactly you have to click, you see that automatically the summary is extended, you see that the categorization is augmented. And now you can think that this is made available in the CRM system. You can think that's integrated in an ERP system, you can think this is a summary that is just sent around for further information proposals, et cetera, et cetera. And you can also see that on behalf of the way how the conversation happens -- you also have a change then in the sentiment also in real time, which might help in a direct interaction and contact center solutions, for example, to do the right answer or find the right conclusions as we have it there. As I said, a first glimpse, making it very, very clear the perfect fit of the acquisition and what we did as part of our own established competence center since the beginning of the year. And I think it shows what customer value is really in there. I mean these examples gave you really insights about how can we continuously augment our existing portfolio and, therefore, strengthen the existing products and solutions, which will help us to really get more share with the existing portfolio and then augmented by more and more innovative capabilities. You saw the example of the support part, if you want, how it helps externally, partners and customers, but also how it helps internally ourselves at NFON. So we also want us, ourselves NFON be a first prime time customer of this AI business communication solution. So we will use it ourselves in all internal functions, et cetera, et cetera. And this is what I mean with a holistic approach. Thank you for your attention so far. There was certainly a lot of information already provided by Patrik and provided by myself. And I think now it's time for a well-deserved break, either take coffee, take cookies or tea, whatever. And we will be back with you in 15 minutes. Thank you for your attention. [Break]

Hello, and welcome back to the Capital Market Day of NFON. Wow, Andreas, that was amazing stuff, what we saw. Thank you very much for the outlook in the technology and product area. But before we jump into the panel discussion, I would like to give you an overview how we want to get this attractive portfolio also to our markets because without monetizing it, there will be no purpose and no benefit for us. Let's jump into the first part. And this is the sales excellence part. I already mentioned as one of the major things we need to drive as a software and tech company. The first category is all about partnerships. I will talk in a minute on the next slide how we categorize partnerships. But definitely, we have already a great DNA of partnering with somebody. We work with loyal partners, 3,000 sales partners out there. We also have a tech partnership with Daktela with [AOC]. So that is a very important part to strengthen that. Internationalization is also a key dimension for us to drive further growth. We already took action in the year of transformation that we retransformed our business in the local entities in Italy, in the U.K. and Austria with a higher sales focus. So we really want to let them benefit from the core business in Germany from the headquarter, but to really put a focus in the investments, into sales and marketing areas. So this is why we are confident also to drive further growth in terms of internationalization. It's also very important, even though we are a complete partner organization with 100% via partners, we want to understand much more about our customers. So this is very important and also Andreas gave you some outlook, how we do this in the future. We want to be really highly customer-centricity. And our employees also needs to understand the needs of our customers and the future innovations they would like to drive from us. It's all about also in sales about empowerment. Here, we definitely need to come up with ideas, how we empower our partners to sell our solutions much better in the future. It's not as easy to sell our cloud solution as everybody thinks. So this is all about training concept, qualifications, et cetera. This is what we understand under sales excellence, but Merano will give you much more detail in a minute in the panel discussion. How do we now think about partnerships? So we categorize the partnerships, as I said, already in tech partnerships, so-called strategic partnerships as well and obviously also sales and services. As for example, in the tech partnership, we have Daktela, we have [AOC] and also MS Teams as a partnership. And in the sales partnership, we do also have the 3,000 partners out there and also the whole blue chip partners with Telefonica, Deutsche Telekom and 1&1. And also, we need to have a combination of own IP, this is why we -- for us, it was so important to also acquire a business like with botario, but also to further strengthen tech partnerships, as for example, Daktela and [AOC]. I think it's the mixture of both where we really have a winning strategy for the future. But now it's enough from my side. Let's go to the experts. And I would like to open up the panel round. And here, my colleagues are here, and I'm going to moderate the panel round. And the first question goes to Andreas coming back to your part. Can you tell us a little bit more about the product road map? What can we expect? When?

Yes. Thanks a lot for the question, Patrik. Yes, the product road map, I think that's one of the key questions. So what comes when -- and you saw on the platform of capabilities that we have. What we are now doing, we are in the process of really to discuss also with our partners and customers about what is their most immediate need. Where can we drive value creation fastest. And then in combination with our own thoughts, of course, we bring this in an according road map. But I think what is very important is that also for our core portfolio. And this year of the transformation, we did a lot of effort and work to really prepare this for the next scale going forward because this foundation, the solid foundation is absolutely needed. So the scale and this openness, as I shared with an API approach is absolutely key. And if we augment that with the possibilities we have on augmenting the existing portfolios, continue to do this stepwise with AI capabilities, plus having a complete new portfolio with new customer segments, this is, I think, a winning thing. And we are optimistic that as part of the partner base, which we have in mid of November, we can share first tangible insights on how this manifests on a road map in '25. Markus, maybe you have some additional insights and thoughts about the product road map and how we do things here.

Yes. Thank you, Andreas. Innovation is a central part of our strategy. And we see, and you saw this before in the presentation, there's market changes very fast. So we have here the speed of adoption, the speed of deployment of services. And this is a core of our strategy. And to grow innovative in a profitable way, this is, I think, where we decide and where the market then will see the winners in the future. So this is at our core of our business. And we see that, for example, like Andreas said, even 2 years ago, ChatGPT was launched in November 2022. So now we see that in the market, we have over 8 billion voice bots, for example, on this planet. We have over 90% of the top 500 companies of the Fortune basically use already AI applications in their daily work. So -- and Patrik showed as well as some other figures. And this is, I think, just a proof point that we go very, very fast. From NFON, we have a huge customer base, and this is important that we engage very close to them and that we really trial those services with them as early as possible. And as you have heard, we opened up our AI competence center earlier this year. You saw already some demos, and this is part, and as Andreas said, this is what we will introduce in the next 3 to 6 months, and we will show far more on our partner day. Our contact center hub solution is really strong, has already AI features if it's voicebot, chatbot, e-mail bot, the integration with Microsoft copilot, this is all already there, and customers start using this, yes, and we will demonstrate this far even more far more transparent to our partners at the Partner Day in November. And last but not least, our core flagship product, Cloudya will be beefed up. It will be enhanced with AI features -- and we will leverage out of the acquisition with botario to really add this knowledge, add this know how, add those features into our core portfolio that overall, like we said holistically, we have a really AI-based communication portfolio. Merano, you want to add something more? Andreas?

No. Perfect, Markus. Thank you.

Great. Thank you very much to you both. And let's talk a little bit about the role of AI in our markets. I feel it is very prominent in the press every day. And I think the technology change is extremely rapid. So how can we ensure as NFON that at this time, we stay at the forefront before the wave and not after the wave in our development.

Absolutely, Patrik. And disruptions happen more or less overnight nowadays, yes. I mean, ChatGPT took them 5 days to get 100 million active users. I think it's the application in the market that we had really after 5 days this magic number of 100 million users. So for us, it's important to anticipate market developments to anticipate what's going on there. So -- and we have their different angles to really be then have our sensors out there. It's market research, it's talking to tech companies, it's talking to our customers here. And this is important. On the other side, to really go this path of an AI-based communication provider, we need to be flexible and etch in our internal organization how we create processes. And for that, we actually have these tools -- have a tool implemented where we can integrate very fast customer feedback, but also our processes from the ideation to then a development and feasibility and then out to the market are agile, flexible, and this helps us to really stay at the forefront.

Yes. And if I might add from a technology perspective, so we are not the ones that are developing the large language models and the core technologies. So we are users of that technology. And I think if you have that in mind, it's important to design if you want the interface between the core AI technology and our applications in a very flexible and open way. So that means if there is a new innovation of a certain vendor in a certain large language model, which is a more price cost and value perspective, better, then we can just plug it in. So that's one dimension. The other dimension, it is less about the sheer amount of people you have to have the right and smart people. This is why, in addition to the people that started these activities in our own competence center. It's a pleasure for us to have 15 great developers that have a year-long experience in botario that really join us in that endeavor. And this is really also a very important thing. And then, of course, you need to listen and you need to be in the circles, if you wonder what's coming next. And there also -- if I come back to botario again, the proximity [Indiscernible] to the university and to the institutions there also helps us. And of course, I can bring in some insights, the same Jana can do. And I think in that combination, we feel very well prepared in that area, Patrik.

Yes. Thank you very much, Markus and Andreas, and I feel very honored and excited about what our people from technology and product will deliver, but need to. There is no success without bringing it to the customer.

Absolutely.

So how do you think about this one, how to drive growth with exactly those thoughts we are having here.

Thank you so much for that question. Great question. So first of all, I'm still impressed. I haven't seen it for the first time, you still see me smiling here because that's what we need from a sales perspective. Let me answer the question in 3 steps. So first of all, there needs to be someone to translate the value of those great product innovations to our partners to the end customer at the end -- and well, here we go, that sales, right? So we need to enable our sales to demonstrate the benefits to provide them with the tools, to demonstrate the benefits and the value of that to our partners and to our end customers. And therefore, this is our job now to enable to get a next step with the sales team. Secondly, talking about partners, for sure, we do have a great partner network, and we need to support our partners. Yes, we need to enhance the partnerships. We need to enable them because, well, at the end, if they are successful, we are successful as NFON. And finally, it's about internal as well. We've just went through a restructuring. We restructured ourselves. And in the past, we were very focused on winning just new seats. In addition to that. Now we also have in mind, well, we need to retain the customers. We need to even -- yes, take the churn rate even more down, retain the end customers and explore new markets. So that's sales excellence.

Great to hear, Merano, thank you. But how exactly does a customer outside there benefit from the restructuring or -- we are performing together in the year of transformation.

Absolutely important. So in our newbuild CRO, so the Chief Revenue office department, -- so we have aligned all the revenue-driven departments under one leadership. So it all starts from a marketing perspective, yes, that's where it all begins, over the sales -- and it does not end, but it continues with the partner services and customer operations. And this is all really important to drive the life cycle to make our partners and customers happy. At the end, it's about strategy. So we need to drive into one direction. Yes, we need to have one strategy, and this is possible with the new setup, and this setup will help us to be faster and deliver faster and more quality to the partners and to the end customers.

Maybe let's talk a little bit about -- thank you, first of all, let's talk a little bit about strengthening our partnerships. I mean NFON is well known in the history of having strong partners out there. But now also, we addressed in the year of transformation that we integrate DTS partner into the NFON world, how do you make sure and how do we make sure that we really keep that good reputation out there?

So first of all, this year, our main focus has been to strengthen the existing partnerships, right? And we have dedicated significant resources to those partners, to those partners to the current partners. And with the new partner program, which will be launching in November, we will also shift the focus and we will bring new partners on board. So we will acquire new partners. And with the integration of DTS as well, there is a change because we will combine the 2 teams and we already started with that, by the way. So in the past 6 months, all the meetings we had with the partners, we brought the teams together, the DTS partners and the NFON partners, with the NFON partner Board as well; we sit together, it was not 2 teams. It was one team. And by 2025, it will be one unified partner network under NFON.

And this is what we describe as synergies between the best of 2 worlds?

Absolutely.

Thank you very much for this. And what specific support do they expect? What can we provide with the partners?

If we talk about support, and you covered it already, you told us, well, we do have a huge partner network, more than 3,000 partners, Thereof, roughly 250 are very, very active. And those very active partners. Well, they get personalized support from us. So we do have our channel partner account managers. And we do offer, well, both remote service as well as on-site service. We invite them to regular webinars as well the partner port is important and the partner portal is important, so they can get all the tools, all the documents, all the information they need. And in addition to that, we have a dedicated presales team for the larger projects, so we can get them even more support. And well, another good example was the initiative we started some weeks ago, where we set up some happy calls. So we've got in touch with our end customers. asking the right question. Well, how are you? Are you happy? What can we do? Is there anything more you need? And this as well helps us to retain the customer base and enhance the partnerships as well.

Great. Thank you very much, Merano. Turning maybe in one of the last topics to the big world of customer centricity. We read it every day, 10 times, et cetera, it's a very prominent topic. But Markus, maybe you first, how do we ensure that we really go into this topic in a serious way?

Clear. Yes. Customer centricity is very critical. We need to understand what they need today, what they need tomorrow basically. And there are many ways. So it's market observation, so talking to different areas in the market. Very important, I go with Merano sometimes out and see customers or at the partner Board. Like you said, we have this 3 times a year. We get this feedback. So we talk very transparent, very open to them. We demonstrate, we do some proof of concepts there, some trials. We include them in our development process. This is very important. And I think we have the beauty that we have those partners across the European continent. So we have partners in the U.K., in Austria, in Germany, everywhere. And everyone has a different perspective. And this is actually good. This is really good because this gives us a very good mix where we can really get the right messages out and feed this into the customer centristic approach. And of course, as well then to bring this to in terms of go-to-market, bring this knowledge into the products, test products with partners. And I think this is the combination to gain and collect this knowledge very early, but then as well in the go-to-market, to this in a stepwise approach, like Andreas said already at the presentation, like what we saw in the demos, yes, this will do the same here to really be at the point where we meet the customer demand.

Great. Maybe, Merano, you would like to add something?

Yes. Well, at the end, it's all about strengthening the partnerships, right? And with our new more customer-centric approach, we create an end-to-end responsibility. And this all enables us to be faster, to collaborate better, which is other. And for us, it really means it starts at the beginning with the brand, so to support and to -- with the brand awareness and the marketing to the lead generation. So we are engaged in lead generation, which we provide to our partners then -- and then throughout sales, we need to make it happen. Yes, we need to support the partner here as well. And then at the end, we need to fulfill it, yes. So we can get to the revenue at the end. That's it all about. And it's -- at the end, it's seamless. So it cannot be silence, it's seamless. And our goal is [Indiscernible] yes, to streamline the journey from the first to the last step in the customer journey.

And Merano, If I may add, I think what I learned also in the first month is that customer centricity is also a lot about listening to the customer, understanding the customer and doing the right thing. And this is something I experienced really at the core DNA of NFONs. So this passion for customer success is really what is the difference that makes us up. And this is absolutely key if we want to explore new market segments, if we want to grow in new customers or bigger customers, that this is absolutely needed because then you need an understanding on how these customers work, et cetera. And therefore, I'm very confident because also botario brings in the same customer centricity thinking, which is also great for us that with this I'm very confident we will also be able then to transition to new customers, segments, portfolios, et cetera. And I think in that combination, it's a very, very core topic, Patrik.

Thank you very much, and I feel extremely excited and also honored to work in such an experienced management team. We are working on all angles in the sales and customer centricity part in the product technology part, and this is the main dimensions where NFON needs to win the future. And maybe to close the panel discussion, we can somehow wrap up a little bit. What do you see as the main core takeaways out of the future and out of our presentation today.

Yes. For me, if I should nail it down in one sentence, I would say it's a continuous innovation, creating customer impact and satisfaction.

Thank you.

Okay. This is a good question, very sharp. For me, it's an understanding the market technology disruptions and understand customer feedback and to turn this into really attractive products.

Okay. Great. Thank you.

Crystal clear from my point of view, and it's about partnerships, is strengthening the partnerships and achieving sales excellence.

Great. Thank you very much. And I think there is no Capital Market Day without having also the translation into the financial and midterm guidance. This is why I put away my CEO Head and I turn on my CFO Head, and I would like to give you a short summary of how we see the future also in terms of the financials. Let's get started a short reminder for the guidance of the year 2024. We had the earnings call a couple of weeks ago, and we are optimistic to reach the guidance in terms of revenue. We're expecting mid- to high single digit in terms of recurring revenue growth, the share of recurring revenues is -- needs to be higher than 90%. Actually, we are running 93.7% and also in terms of profitability, not only delivering last year, but also well on track to do more here. We are expecting an EBITDA adjusted in the range of EUR 10 million to EUR 12 million. What we also gave as a management team in an evaluation, and we are very transparent in the communication also to you guys, we looked and obviously also took our Supervisory Board into the loop. We looked at different cases for NFON to the future. There are 3 general, let's say, cases, we can -- we thought about and obviously, we go to the optimal one for NFON, which I tell you in a minute. But there would have been the optimized case. I think the optimized case would have said that we stay in the area where we are UCaaS, voice-centric and we've really take an effort on focus on profitability and efficiency only. That is maybe not the best idea because we believe that the UCaaS voice-centric part over the years already starting next year, the growth acceleration in terms of top line is definitely going back. There is also the option of only developing features by ourselves. We are doing, but obviously, also, you need to first invest before going to market and gives you the return in terms of higher revenue acceleration back that would have been the year 2026. And now turning to the mixture of everything. And I think that's the future of NFON. This is where we are really proud to really already took action with the acquisition of Botario, we believe into the make and buy case. Because we really can benefit from the Botario acquisition also integrating it in our product portfolio. We can also from the competence embedding with our AI competent center, go into the make case as well. And from a financial perspective, we are immediately switching on positive contribution to the NFON results. This is why we definitely want to future transform the make and buy case. What does that mean for the midterm guidance? And as I said already, the fundamental formula, I would say, is very important for us. We want to grow the business, EBITDA growth is bigger than revenue growth. Revenue growth [Indiscernible] is bigger than market growth. That's why we need to move more to the double-digit growth in the future. You already see this impact in 2025. And also from a margin capabilities, we definitely have some further growth and some further potential. This is why we want to bring the business in 2027 also to margin being bigger than 15% in EBITDA. You also see a subcategory also in terms of -- we will obviously report that in the [organic] way also for next year. You will also be informed always about the performance of our acquisition botario. We already communicated in the last earnings call that we do see a 40% growth rate, and they are binded with an earn-out on this on the next years in top line, with a stable margin development of 30% plus. So to repeat and also then obviously jumping in the Q&A session, we do have defined now a winning strategy for NFON. Yes, there's a lot of transformation work. Yes, there is a cultural transformation, but we are very optimistic that we found a way and defined with a very strong experience management to go into this winning strategy. We believe into developing our core products and also building an integrated AI capabilities into it. We believe into the world of operational excellence. And yes, we have something to do in homework, but we are very confident that we have a complete different operational excellence by the year-end. We believe that we have some room for improvement in the terms of go-to-market initiatives being much more sales-centric. And we also want to invest further into partnerships and also M&A world, and this is what I think is defined as our winning strategy. So first of all, thank you very much for your interest before I'm now turning back to the Q&A part and answering also your questions. So now I need to get -- it's all about technology. This is one exactly.

So I start with the first question, goes to Merano. I'm going to moderate the questions for you. Merano, when exactly will you announce the new partner program.

Yes. We already talked about it sometimes today that there is a new partner program upcoming. There is a big date in our calendars. It's the 19th of November. So 2 months from now, we will sit together, we come together with over roughly 250 of our partners in Munich. And we will have keynote speeches internal, we will have external speeches as well. We will do workshops and demos as well. And at the end, for sure, there is a big party. And this is the date where we will announce the new partner program.

So now the moderation is challenging me. Yes. And Andreas, maybe the next question is going to you. How does the botario takeover fit into NFON's overall strategy?

Yes. Thanks, Patrik. I think first is of all, if we talk about the botario acquisition, I would say, let's maybe think it from the people, the product and then the processes dimension. I think for the people, it's important that this is a fit of mentality and also of capabilities. And our combination of building up our own knowledge in the competence center, combining this now with the right attitude, very important. But it also goes beyond technology, what I also learned and we made great experiences that if we involve people like in the service and support area, in the support bot and automation cases, it's not that they are rejecting that on the contrary, they are willing to put things in to improve it further to get their ideas in, et cetera, et cetera. And this is really, really very inspiring to see. And then, of course, on the product side, as I explained already before, we come from 2 different angles. One, the AI business automation-driven angle, which then transition seamlessly to phone and voice and our capabilities, and we come from an extremely strong voice background and our stepwise went into that. And this is a perfect fit. And I think it's also important on the product side, that you have a vision together. And this is not what we only have in this team, but also the leads of Botario are exactly the same vision. So it's a perfect fit in that sense. And then on the processing side, it will help us internally, but you should also not underestimate the potential that, that has maybe externally. So if we are a great customer, why not productize what we use internally for our partners and make it available to them or even our customers. So this is maybe the step after the next step, but this really also shows the potential that we have and how the things fit together also strategically.

Great. Thank you, Andreas. I think the next question fits well to you, Markus. How exactly will AI be integrated into NFON's existing products? And what new AI-driven features can customers expect?

Right. Thank you. I think it's -- between the lines, we heard this already a few times, but let me just answer the very clear answer. So one is we have already AI in our portfolio, not in a core, but we have already features, functionalities in our contact center version, for example. And like we said today and heard today it's voice bot, chatbot, e-mail board, it's GPT knowledge base, we can link it with the Copilot of Microsoft. So this is already in place. The second is basically with our partner, AST Telecom, where we have the compliance recording already in our portfolio. It's a very niche service, but this is where we see when our customer has this demand. It fits perfectly to the customer requirements. So this is what we already have today. Secondly, we have, like we said and heard today with botario, a huge know how experience in really bringing those technologies into products and into then customers, and we will leverage this. So I think we mentioned this a number of times. And from there, we will feed actually this into our core portfolio, Cloudya and our communications portfolio and our flagship product, so that we have then all of those really AI features in our entire portfolio. And last, but not least, I think what we saw today, it's not always about a product, it's about how we actually enable the customer journey to make it simple and easy -- so from the way like Andreas presented in demo here, I have a question. So I'm existing customer, I have a question. I don't want to call them, I don't want to look through paper. I ask in prompt basically and get the answer immediately or product configuration or I'm a customer and I'm looking searching for a new solution. And I think these are ways that we see that we will bring to the market in the near future, and it will really help customers to find the right product, to really, if they have a question when they're already a customer to answer those questions very quickly immediately and will create a new customer experience.

Great. When we talk about AI features, obviously, we also talk about the botario acquisition. And this is what a new question came in, and maybe we can put it already here and maybe Markus and/or Andreas can respond. What is the up and cross-selling potential of botario solutions among our existing clients?

Okay. I will start and then handover. I mean, Botario with the voice and chat bots, and with that sort of solutions, targeting so far larger customers. So clearly, we have in our customer permit, we -- our target customers a bit at the bottom end, yes, but we have larger customers. So there are a couple of levers and dimensions. One is we have larger customers, and we will, of course, use this cross- and up-sell potential to those bigger customers, and we have partners that actually have not addressed larger customers in their customer base. So for them, it's additional growth opportunities. And the second part is that we have wholesale partners. Wholesale partners that actually sold so far our portfolio and also like I said, have not addressed larger customers in their entire customer portfolio. So these are multiple dimensions where we can actually use Botario's products and services for up- and cross-selling. Andreas, maybe you want to add?

Yes, maybe add 2 dimensions. So what we also have in mind if we have a look at the smaller customer base. Of course, you cannot expect that they run big AI technology projects. So there, our approach is that we put it in at a fingertip, if you want. So you just put a button, get the capabilities and then you just use it as is. So that is our vision for the smaller-scale customers. Another dimension is that Botario due to their learning also of regulated industries in the health and insurance sector, are able to provide their services and capabilities on demand also at the customer side. So as a private cloud or managed cloud environment at the customers, and then the customers have control about certain compliance regulation and regulated industries. And this is a segment we are currently not that present in where there is a big cross-sell opportunity because if you have a perfectly integrated cloud core telephony solution with the Botario portfolio as we will have as we go. Then of course, it's an easy up-sell opportunity in completely different customer segments for us as well, Patrik.

Great. Thank you very much. And maybe we turn to Merano, he has a question. Can you give us more insights on the plan to build a unified partner network as part of the DTS integration project?

Great question again. And let me -- before I answer it, let me just point out I love the fact that we talk so much about partners, right? This is really -- this is amazing, and this is really dedication, yes. So how do we combine the 2 teams. So as we speak for now, so we do have 2 teams. We do have 2 sales teams, and there is an overlap, yes, because one Account Manager -- Partner Account Manager is working with the one part of the partner team, the DTS team and the other one from an NFON perspective and now we will merge them. So we will have kind of hybrid Partner Account Managers. They will serve the entire partner base, focus on the most active, most -- biggest, most largest partners and support them in the best way they can. So this is -- we will bring them together beginning of next year, which is basically, which is the last step of the integration done, right?

Great. Thank you very much. Maybe one for you, Andreas. What synergies and innovation potential do you expect from the integration of AI technologies into our existing product range?

I think maybe we talked a lot about also how we bring it together in the product evolution. I think one point that we did not talk about until now is the innovation potential and synergies. And this is what we learned and saw in the last month when we brought together people from different parts of our organization with different backgrounds at the beginning of the year because I said our intention was to really have a holistic approach on how to do this. And there's so much positive energy came from the diverse perspectives and ideas like in my area, it means that or at home, I tried this or I already experimented with that, and there you saw the result of some of the ideas today because otherwise, you cannot get this innovation end to end. And if you then add this with, again, a different perspective now coming in with Botario, you get another boost in ideas and innovation and synergies and thoughts, et cetera, and so inspiring to see the teams sitting together and creating this with the contribution all across of Merano, Markus team, whatever, going into finance, marketing, et cetera. And I think this is really the approach on how we did it. I'm very, very optimistic how we can materialize this across the company and not just in selected features in the product.

Great. Thank you very much, Andreas. I think the next question goes to me. NFON has a strong hold in the German market. Noticeably presence in Austria and the U.K., while the business is still relatively small in other European countries. Looking at your growth ambitions, where will your focus be short-term and midterm? So definitely, what I already said on different opportunities in conferences and also in communications that we are not a European player already. So the thought was really the growth dimension of European is internationalization in 2019 when the IPO took place, was great. But in the countries we were struggling. So this is why we took immediate actions to really change the organization in the countries. So this is what we do short-term. That means we're really focusing on existing countries, meaning, making them first successful, and that's the U.K., that's Austria and that's Italy, and we are seeing already good progress before we think about other markets. When we turn to other markets, we want to have a clear market study, we want to see what competitors are in and what USPs we could offer to those markets. We can already see that with the future product development, and the AI features that our portfolio is definitely becoming easier to go international. But the message is, first, make the international countries we are in successful, then think about other countries. Great. Then Patrik, oh, that's me, again, you showed an EBITDA margin of about 15% -- bigger than 15%, how exactly you're going to reach that? Can you elaborate on that a little bit more? So as I was already addressing that the business like us is -- needs to be capable to generate an EBITDA margin of 20%. So this is bigger than 15% is already in that range, already moving to 20%. And we have definitely more efficiency potential in our P&L. We have a lot of one-off costs already in the transformation work we are doing, like, for example, the DTS integration work. We also have a huge room for improvement in terms of the FTE, the personnel cost ratio. Getting that one below to 40%. And you also need to relate the EBITDA margin in terms -- in relation to your growth ambitions. So obviously, when we only grow on market, then obviously, you could generate also the 20% of EBITDA margin. But if you want to do more than market, I think it's also worst to invest. And in exactly that balance, we will give you always the short-term guidance for the year. But we're definitely also confident that we have a lot of room and being one part of the formula is that we want to drive EBITDA growth stronger than revenue growth. So then the next one. Hi, Patrik, again. To which extent does your ambition to drive revenue growth bigger than market growth and EBITDA growth bigger than revenue growth? On the macro environment, if you have to break it down, what are internal measures contributing to growth and what to macro? I mean that is a very interesting question, and I can't give you exact figures. But the macro environment, obviously, in Germany, in our main market is tough at the moment. I mean I don't need to say you, I don't want to see the glass always half empty, even so I'm a German, but I want to see it optimistic because I also believe that we have so much room for efficiency and digitalization. With our solution, we help companies to generate more efficiency. That means it's now worse and it's now the time to really implement and invest into our solutions. This is why I would not allow internally and also not externally, even though the GDPR and the whole economy power in Germany goes down or is under pressure, that we should really focus on that. We are somehow decoupled. Also what Andreas gave you as an idea in one of the videos that also the lead time to our customers becomes much shorter in the future. That is also one measure we want to really make clear. Nowadays, it's still a long lead time. But with those capabilities we are having, lead times are going down. That said, I'm very optimistic that we can generate, obviously, an accelerated revenue growth here. Even though the macro situation is a little bit in the challenge. But there are a lot of couple more ideas, but definitely, we wish to discuss it. So the next question, here if -- did I understand you correctly that you target an EBITDA margin of 15% in 2027, you sounded more optimistic? I answered that question already. I said bigger than 15%, and it's also in relation to the revenue growth and again, if we would be only on market growth, then I'm also confident to reach the 20%. Then there's a question for Andreas.

Finally.

You are comparably small player in AI and business communications. Are your funds are sufficient to drive the innovation you want? What kind of margin leverage do you see internally from using AI? What kind of growth impact do you see in terms of adopting new users, but also increasing the ARPU?

You already gave me, 3 questions in the box, okay. Let's do one after the other. So the first one, and I think that's a very good question. Let me maybe clarify again. So we are not creating an own large language model, et cetera. We are leveraging the state-of-the-art technology that is the large language models, that is the GPT capabilities, that are also new innovations like genetic frameworks, which you saw as the baseline of our first demo. So a mixture between conversational experiences and guided experiences. So we are a user of that technology. I think that's very important to understand. If you are a user of that technology, and then you do 2 things, right. You don't need an arbitrary amount of people, you need the right people and the right experiences who know how you bring the ideas to production. I think that's the key differentiation. You see a lot of companies that make great demos and might get also a lot of money, but they are not profitable. So there's no business and which means a lot is shelfware and not really productive. If you take a look at the financial figures of Botario, it's exactly the contrary. If you take a look at our ambitions with a formula, Patrik outlines all the time, then we are on this profitable growth ambition. So I think this is important, a clear focus. And we do not do widespread things. This is why I put up the example along our customer value chain. So this is exactly from where is our strength, where is our customer and partner understanding, how can we build on that and leverage that strength and augment it and automate and innovate that with AI capability. So we do it in a very specific segment. I think that's the other thing. And with that and the combination of the acquisition, I feel that we are very, very well equipped. And of course, as with every innovation, the more it touches all your core processes, et cetera, et cetera, then you put more people on these new topics. And maybe as a last thing, the investments we still do this year and started to do on our transformation journey, this is the core foundation for that. So we invested already in streamlining our core internal IT systems into optimizing our processes into revisiting the way how we develop what Markus was also sketched, et cetera. This is the baseline for that. So a lot of ingredients come together, and I feel comfortable that with the current setup, we are rightly set up to bring the innovations that we announced. Okay, second...

And maybe I could -- also would like to add the ARPU. The ARPU discussion we had, and I would like to remind ourselves that the last couple of years, the ARPU really became under pressure. Because really in the traditional UCaaS market, we went down from 11% to slightly below 10%. We are now returning back, there was the voice minutes part and the airtime part which came under pressure. There was also the positive pricing impact we had year-on-year. But nevertheless, we stuck somewhere around the EUR 10, but with AI and also contact center solutions, we always had the idea to also under -- in the midterm perspective to really increase now the opportunities also on ARPU side. Because you can imagine that you have a different pricing power when you add AI features as well and also being in the contact center world, also delivering premium services, we already see that attractive ARPUs going clearly into double-digit, almost sometimes into 3-digit is really making an impact. So this is also to the ARPU management. With these moves, strategic moves into AI and also contact center world, we're definitely going to increase the ARPU over -- in the next couple of periods.

And now I remember the second part, margin. The margin -- so of course, if you take a look, and I try to simplify the example on the support bot or technical documentation. Of course, this will lead to effect, where for the standardization of the questions you need less manual investment. In that sense, there is an efficiency gain. But think about that in 2 dimensions, how we see it. The one dimension is, first of all, maybe you don't get even the people nowadays to do these jobs? Or you want people that do these jobs if someone is calling in at a doctor's appointment, you don't want the people that have the skill-set to treat the patients, to do the dates when the next visit is. So it helps you to stay competitive and grow, although, you maybe do not find the right people with the right skill-set. And the other thing is you relieve the people from quite boring work. So do you want to answer every time before the summer vacation starts the same question that I outlined, no. But the people have so much passion, the people at NFON for their customers, that we could easily leverage their energy for new potential, for new customers, for new partners. So this is the growth dimension on the one hand side and the efficiency on the other, and that helps us to really grow in the margin side, but also leverage then the money we have then there for additional innovations going forward.

And maybe last thing before -- while you were talking, and that was very important in our M&A idea. That Botario is already generating 30% cash flow positive, 30% of EBITDA margin. And we can benefit from that one immediately. That was so important also. This is why we also had the idea of having a company in the portfolio, which is immediately from day 1 contributing to the financial results, also to have the opportunity to grow further our core business. Maybe I see 1 last question -- one of the last questions, and we can all answer it together. No, there are a couple more. Exactly. Partners play an important role in our growth strategy. What kind of growth impact do you expect from them? When should we expect the first successes to become visible? [ Maybe Merano, you can take that. ]

I guess, I can that. So first of all, the majority of our business is driven through partners. So there is here and there? there isn't, yes. Direct customer without a partner engaged because the direct customer is approaching us, yes, and we don't send them away. So -- but in this case, yes, we treat them like a partner. So at the end, all the growth is coming from partners. And there are 2 dimensions, first of all. So as we stated, there will be new partners due to the new portfolio there will be the acquisition of new partners. So then it's absolutely new business for us in this dimension. And for the others, there is -- well, from partners who are very, very successful already and some other partners, which do less business with us and anything in between. So there is a wide range of different partners. But at the end, the answer -- easy answer is the growth will come from the partner.

Maybe I can add one point there. And I think this is especially with the, let's say, the development of AI in the industry. I think we will see that some partners sold communication services as a cost factor. And I think we will become a solution point. I think this is as well a mindset change, so that not all partners will be ideal in the future, and they have to evolve themselves as well. And I think with the addressing of larger partners and more solution partners, I think also it will have a positive impact in the ARPU because, yes, the ARPU came under pressure. But I think if you now look from a solution perspective, how we can add more value to our customer by going deeper into the value chain, increasing the share of wallet, I think we can: a, give those partners more revenue opportunities; and b, generate higher ARPUs for ourselves.

Fully agreed.

Great. That's a very good answer, Markus. And I think the next question goes to you. And I think you made a great overview of the last couple of days on that. With the acquisition of Botario and the higher emphasis on AI, how would you describe NFON's market position also compared to peers going forward?

Thank you. This is a very interesting question because after the acquisition of Botario, of course, our phones were not standing still. So some partners, of course, we had contact with and it was very positive for us and very good. But also this creates at peers some eyebrows and how could they do this so quickly so fast, yes. So this is, of course, clear. I think for us, this is really a big lever. It's a booster to position us, to leverage the knowledge that Andreas pointed out, and I think we have this multidimensional growth opportunities. And I think it will put our peers a little bit under pressure because I mean, demand and the opportunity is clearly there in the market. So it's about addressing it and bringing it home. And I think for our peers, it will mean that they have to follow up.

Great. That sounds good. Maybe I take the next one regarding financing of future M&As. Is it possible that you will perform a capital increase going forward? So a lot of thoughts around that one. We, as a management team, also towards our Board. We are now committed to overperform the Botario acquisition first. So I think in the size -- and you always need to know where you're coming from in the size of the NFON business, and with our track record in the history, I think it's now really that we gain trust and really making the Botario acquisition successful first before starting new ideas. When we start new ideas, obviously, when we overperform, then we have another financial capabilities and also means, but also talking about a capital increase is always possible for our company, but I would like not to bring it into the game now, today. Okay. Then there is another comment. Hello. Thank you for the CMD, thank you as well. Are customers asking for AI capabilities you are developing already? Or you are developing with the expectation of demand to come after the features are ready?

Yes, I would like to get it started because it's a great question. And it's both. And I will share a story when we first time exchanged it with our partner Board, the ideas, and we were not sure what was the reaction. And you know what interesting, the reaction was that, they stepwise, explained us that they are already on the topic that they see it at customers, that they are already exploring. And these are the 3 use cases they would love us to do, et cetera, which wasn't a perfect fit to what had we in mind. So there is already a demand in the customer base, for sure, also in our existing customer base. And the other thing is what Markus also explained, we also have to do a step forward and create appetite and then in very close collaboration with the partners and customers validate with the automated tooling that we have there also as a support, what resonates, what not, where is the willingness to pay, et cetera. So it's both dimensions. And I think if we combined it really with our customer centricity and the partner focus, I'm very convinced that we will put on solutions that meet the demand and not just showcases, so to speak, for the shelf.

Great. Thank you very much, Andreas. I think, Markus you can help me with the next one. I'm going to start on it What Cloud PBX penetration are you modeling in your forecast to get double-digit growth rate? For example, to what extent your guidance depends on market growth versus your product road map and market share to win? So what we see, obviously, and I mentioned it also in my presentation that the traditional UCaaS voice-centric market and that means Cloud PBX is slowing down in terms of growth. It came from double-digit. It goes to single-digit -- higher single-digit, meaning 6% to 8%. You also saw half-year reports from competitors like, for example, Gamma where they only grow organic in the Cloud PBX case around about 5% to 6%. And this is what we also see realistic. Our idea to bring the traditional business we have also without Botario to high single-digit, almost double-digit, is clearly sales excellence, first one. Second is also adding premium services like we do, for example, in the integration part, SIP trunk and also in contact center word. But Markus, if you want to add something?

You answered the question perfectly, Patrik. I couldn't do it better. So exactly these are the drivers here. I think as you said, the Cloud PBX market will more or less flatten out. And the growth will come from the premium services previously called its contact center, it's recording, it's the integration part, yes, really eating us into the value chain of our customers. This is where the growth will come from. And I think together with AI, this is a perfect place for us to really grow us into this space.

Great. There's one nice question I really love. I could talk for hours. Can you maybe bring the -- can you go up a little bit in the moderation part, one more up, a little bit or down. Exactly. There. Here we go. Why is the German market so much behind in Cloud PBX penetration? And what could change it? I mean, I'm a German, as I said. And in the market and in a country where you still use the fax machine, I mean, this is all said. I mean, we have a problem in digitalization and in all the infrastructure and this is why in the last couple of years, I would say we were always behind in terms of digitalization. I know it also from a former industry when it comes to subscription and perpetual lenses when it comes to more or less data centers within Germany, instead of hyperscalers, all that stuff, we have to catch up as a German, let's say, population as a country. And that's my argumentation. There are several others, but maybe you can add your view as well.

maybe one provocative thought. So if you take a look at the beginning, if you have compared maybe now with the iPhone at the beginning, we think why should I need an app to book a flight or a train service, and now if you don't have that, you are not competitive any longer. So I think in Germany, the combination of more and more regulations, creating more and more frustration across all industries. And then that in the consumer space, you get just with talking to a smart device, all the answers that you need will lead to more and more pressure to do the things. You see that already a lot of public institutions announced just in the last weeks. How they want to invest in customer service, with AI capabilities, et cetera. And I think this is a sweet spot, the whole health industry, I think, how you serve in the financial industry, et cetera. And this will become more and more obvious. And then I think there is a potential that we can unfold and exactly at that point in time, we are there.

Great. Maybe one more comment from my side. I think it's a combination, as you already said, but I think especially the Cloud PBX market in the German market is a bit behind the rest of the European markets because: one is, we still have ISDN in our market. I was at a partner conference last week, and they have a 5-digit number of ISDN lines, having that in year 2024. I mean, we should say, chio, ISDN; the second point is, I think, the upload, the broadband upload capabilities and you need this also in AI, if you're in your home office, for example, and you have not enough upload bandwidth then you're going to have a problem. And we see this in video conferences and so on. So I think this is where the industry, also the government. So they need to invest there because if we see that the upload bandwidth in Italy, what was 6 years ago, behind Germany is now ahead of Germany. So this is an industry issue, yes; and the last point, I think, is that Cloud PBX in Germany, and we are engineers usually, and it's coming from Siemens and all the PBX manufacturers, they linked so many technologies to a PBX that's in-house, if it's the elevator network or is it a gate somewhere. And I think with AI and more new technologies this will go fast. That's the reason why we're behind because in other markets, they don't have all those networks linked to the PBX. But once this is cut, I think customers will move to cloud and not only to cloud to UCaaS. They will then add really far more features with contact centers, with other integrated business communication services in combination with AI. That's my sort of answer for that.

Great. Thank you very much. We have 2 more questions at the moment. The first one you could also help and add. To what extent do you expect your existing 55,000 customers are willing to pay for additional AI features? That's a very difficult one to answer with a concrete figure. But what we didn't discuss really with the Botario case that we also and entering segment also together with AC into a larger customer segment. Traditionally, as you know, that NFON was always in the SME area. We have still 17 seats per customers in place, but with Botario, with AI features, we just open up a complete different enterprise segment for us, which is also helping us to really win new customers. how many customers are really from the 55,000 are willing to pay for AI features, I do believe a lot because it also generates a lot of efficiency on their side, but maybe also share your view. What we can't give at the moment to be very honest, we can't give you a figure, but we can give you some impressions. Maybe, Markus, you can?

I mean, if this new feature creates value for them, productivity, efficiency then I think a customer is prepared to pay for this. And it will not mean that he has to pay 3x the ARPU that he pays today per user. It's an amount that will go then from where we have our ARPU today, around EUR 10, maybe up by EUR 3, EUR 4 and I think then, for us, the platform impact, the SaaS provider impact kicks in with the 665,000 seats that we have in total on our platform. And I think this is where we need to think it needs to create value, it gives the customer efficiency. And then these few euros more per user per month will not be a hurdle.

And maybe a last thought, what also helps us there is that the end users more and more get used to pay for this service. So you get a certain amount for free. But if you want to use the latest capabilities, you pay, for example, for GPT-4o account EUR 25 a month for the Microsoft Copilot, it's a EUR 30 a month, et cetera. So it's already common that this creates a value that people are willing to pay for. And I think, therefore, I also think if we focus on really creating business value, we will get a reasonable price because the customer has also savings from that.

Great. Thank you very much for helping. One last question. Also, we do it together. From every 100 customers that migrate to the cloud in DACH, how many are choosing going to choose an NFON?

Let me. Maybe I would love to answer that from a sales perspective, because it's not easy...

[indiscernible].

It's not easy because it's a very fragmented market, and we don't have an exact figure but from a sales perspective, I don't believe 100% so 100 out of 100 is realistic, but maybe getting closer to 99 so that's the objective. 99 out of 100 from a sales perspective.

Yes, you also need to add that the market is highly fragmented. And everybody is delivering other services, I mean there are not only RingCentral and U.S. competitors, but there are also local competitors like [ STARFACE, Enreach, ] everybody is heading to a certain direction. Obviously, we want to have them all, but at the moment, what we also admitted that we are not happy at the moment with our growth, but we are working on future growth opportunities from next year on. So this is why the answer is nice. I also like to hear the 99 of 100. But obviously, we can't give you an exact figure. But I'm sure for everyone that watched our session today, it's 100%.

I love it.

Perfect. So I think we are coming to an end. It's almost 1 hour earlier as we expected, but I think you also met the management, which is really proving that we want to talk about facts. And we really took the pleasure to inform you about our future ideas. I would like to take the opportunity to thank you for your interest. There's one thing, which normally is now the moment for the organizer of such an event to give some flowers. But now I can give my heart. That's what I learned that you do in digital meetings to Friederike Thyssen, who organized such an amazing meeting. I need to say that I prefer personal meetings, but it was great and well organized, and the technical colleagues also did a great job. So thank you very much, for us, it was also a very great day for us because it was also pushing us into delivering the materials and the presentation. So thank you very much for your interest. We keep you updated on the execution progress in the earnings calls, in the conferences. And again, thank you very much for your interest, for your trust in to NFON, and we are happy to deliver our thoughts. Thank you very much.