Good morning, ladies and gentlemen, and welcome to today's conference call regarding the presentation of the half -year results of 2021 of NFON AG. At this time, all participants have been placed on a listen-only mode. The floor will be open for your questions following the presentation. Let me now turn the floor over to Sabina Prüser. Thank you, Kapuna. Good morning, ladies and gentlemen, and a very warm welcome also from my side to our call. My name is Sabina Prüser. I'm the head of investor relations. Joining me today are Klaus von Rottkay, our CEO, Jan-Peter Koopmann, our CTO, and Petra Boss, our CFO. Klaus will present the financial results for the half -year 2021. The presentation will last about 20 minutes. As always, there will be an opportunity to discuss your questions afterwards. With that, let me turn over the floor to Klaus. Good morning, everyone. Thank you for dialing in. It's my pleasure to present you the numbers of the first half of the year to you. Yeah, let's dive right in. Obviously, let's start from where we actually are heading towards. It's to be the leading provider of voice-centric business communications in Europe. Usually at this point, I explain a little bit what I mean with voice-centric business communications. Voice is traditionally our strength, but obviously communication has evolved massively. There are many different ways of communicating in the business world. Telephony and IT worlds have increasingly melted together and continue to do so. There is continuously increasing overlap between telephony, collaboration, and business application space, and wherever the voice is involved, this is something where NFON aims to play, and I'll come a little bit more into detail going forward on how to think about that. What is NFON? For those of you, please check if you remember: the DNA of our company started as a company introducing cloud PBX, which was kind of the second transformation wave hitting the telephony market. Since then, obviously, it has grown far beyond that and is now offering a full UCaaS portfolio, having entered the contact center space and offering additional solutions, integrating into other communication methods or business applications. I think that has been a tremendous development, and obviously going forward, there's much more to come. As you know, we've been listed for three years. We are active through our own representations or through partners in about 15 European countries and by now are proud to report a channel network of about 3,000 partners. All right. Let's dive right into it. As you know, we are a 100% channel-focused company, so we rely on our partner network, and we serve customers from everything starting from SOHO up to enterprise. As you see on the left side, there's this bucket called direct. Obviously, direct is something we employ very selectively, truly for large accounts where we actually help our partners either close the deal or deploy the solution, or frankly, just when the customer wants direct access to the solution provider and basically additional credibility before they bet the farm on the solution that the partner recommends. We never go direct all the way, even if the customer contacts us and we are involved throughout the sales cycle. There's always a partner at the end of the deal. Our traditional model is through dealers and disties. In some countries, wholesale is an important model, and we have both that we support with our own airtime and the wholesale partner providing their own air time. Our business model basically consists of licensing fees for the seat, the PBX extension, and the service we're delivering to the customer side. Air time is obviously additional to that. Those are kind of the recurring revenues, and on top of that, there is a one-off fee for activation where that applies, a fee for hardware if the customer sources it through us, and a fee for professional solutions where they are required, especially when implementing more complex solutions, premium solutions, or with larger accounts where there's a more complicated heterogeneous environment. As you're all aware of, the market is moving massively. It's a very dynamic market, partly driven through technological progress, but also, obviously, the pandemic has had an accelerating factor for how people work. Traditional telephony has obviously completely developed into unified communication. It doesn't stop right there. Basically, also, a contact center is something that's increasingly intertwined with UC. You need to integrate nowadays in business applications for many customers. This should support some kind of workflow in the department that's actually relevant. To have a seamless transition and support for these business processes requires, obviously, a good user interface. These are basically the different elements that keep growing together and putting more emphasis on integration of these individual pieces and on providing the full suite. We have our focus market for providing that in Europe. The reason for that is Europe is a really, really huge market and it's underdeveloped compared to, let's say, the US. Especially the geographies we are playing in, many of those have just really low penetration numbers of cloud PBX. As you can see on the right, the SMB market makes up about two-thirds of the landlines, with enterprise taking the last third. This is obvious. SMBs usually have an easier time moving towards a cloud service. This has traditionally been the focus of us and also many other UCaaS providers, and it's still massively underpenetrated with lots of growth still to come. All right. Therefore, we presented, I think, to date, about four months ago, the first time, our strategy that plays on these developments in this market. It's obvious to offer an integrated business communication solution with these different solutions and workloads integrating around business workflows to double -click on the user experience as we see that this becomes more and more important as the solutions underlying it become more complicated. As I said, it really needs to support business processes. This is obviously a longer journey we've embarked on, but with the release of our native iOS app for Cloudya just a couple of weeks ago, you can see that we have actually started the journey. Third, as I mentioned, we are a channel company. We're actually very proud to have a large and loyal partner network. This is something we continue to hone as our strength and to further develop, as you can see on our growth path. Basically, the three steps are to really target what we want to address, which I briefly outlined, to enhance our product portfolio to deliver on that, and to scale our channel network across our geographies to increase our market reach and serve even more customers. For that, we announced a couple of key measures for our strategy to implement this year so we can actually measure progress. one is that we aim to significantly ramp up our technical resources, which, as outlined, considering the increasing complexity and the different workloads you have to play and the different integration capabilities, are required. We are on a good track. Obviously, it's really, really difficult to acquire top technical talent in full employment markets. We have made significant progress, and we're still aiming to increase the number of resources by about half until the end of last year versus the end of 2020. We also said we would increasingly invest in marketing with a focus on channels, with also increasing more than 50%. As you can see, many of the programs have been in place now, and we started ramping up the investment in Q2. However, due to maybe a longer lockdown than we expected and having to establish those programs first, we started a little later than we wanted to, but we are on track in terms of delivering what we said. We actually continue to grow into larger accounts, enterprise accounts counting above 250 seats. This is something we want to do very cautiously, let's say, maybe not cautiously, but we are very deliberate about entities we engage in in terms of delivering a scalable cloud service and not doing bespoke one-off custom developments for large customers. That's basically our premise. We can see that the pipeline is developing nicely with many accounts actually being in the enterprise. This is something, obviously those sales cycles are a little longer at those customers, where we increasingly see that we make inroads, while also some of our product capabilities still need to develop for that, which we've also planned for 2022. We have started intensifying our activities in the CE region, most notably with Poland, where we established and opened our own office in May, in Q2. Obviously very nascent still, but more to come. Those are very attractive markets. I would say competition is rather new there. They're not very consolidated. Obviously have all their individual challenges, this is a really exciting high growth region that we are opening up for us. In order to amplify the increase in technical developments we aim for, which we hire our own engineering talent for, it's obviously important also to find partners to help you accelerate this journey. We've taken a small initial step with acquiring a minority stake at Meetecho, an Italian leader in WebRTC technology, that enables us to develop our own video conferencing solution better, and commit to access to leading edge technology for that. This has been closed, remind me, I think it was in June, so at the end of Q2. We'll look forward to many good things coming from that, with our own video conferencing solution at the end of the year being the first step of continuous development on that side. Let's jump right into the business highlights. For the end of H1, we are reporting seats of 575,000. We now have more than 3,000 partners selling, installing, and supporting our solutions. We have, as a milestone, launched at the end of Q2, centrexX 3 for our daughter, Deutsche Telefon Standard, which is basically a new cloud PBX offering. The reason why I'm mentioning it there is because it's an important milestone when we have actually completed the migration of the PBX offering from Deutsche Telefon Standard onto NFON technology. We are one homogeneous technology within the company, and we are also already using our new business support system that we are still developing, but it's already working for that part of the business. It's an important technological milestone for us. Also, earlier in H1, we launched our Meet & Share, our video calling through Cloudya, which has had nice pickup, and obviously we are using that to come up with a more full-blown version at the end of the year. Let's jump into the financial results now. All right. As you can see, we grew the seat base year-over-year by 13%. I'll mention it; let me explain to you why it's only 13% still. It's significantly double digits in the 12 months that were the really, I would say, intense pandemic phase. That's also a little bit part of the reason, because we are comparing basically H2 2020 and H1 2021, which was especially marked by the pandemic against the previous seat base. Considering that we think that we'll have come out of it a lot stronger into H2 2021, and that we have the programs now in place and the investments ramping since Q2, we can actually accelerate growth in H2 2021, and especially obviously then towards 2022, which is part of our growth strategy overall. We think this is somewhat a special situation in that time period we're looking at, and we foresee accelerating seat growth going forward. Obviously, as far as we foresee the pandemic developing and no major insolvency -driven churns, currently there's no visibility for that. ARPU has continued to develop nicely. Obviously, this is the positive side of the pandemic, and I don't want to call it the pandemic; it doesn't have a positive side. It's a positive effect that the lockdown has on the business; that is, just airtime is going up, and we see that increasing ARPU. That's a bit of the other side of the coin of somewhat slower fee growth on this. All right. Let's look at the development of the recurring revenues, which has continued to develop very nicely with a growth of 17% compared to the first half -year of 2020. Total revenue growth was 15.6%. You can see recurring revenues again grew more strongly than non-recurring revenues. A couple of reasons for that I'll mention later. Especially in Q2, we actually had good growth of non-recurring revenues, which are basically hardware installation fees and professional services. Hardware, actually, says it has been hampered through the pandemic, which, as I mentioned several times, is not strategic to us in terms of our only need hardware to light up our solutions for our customers. Many customers have just less need for that, or often some customers say that the headphone is basically their new hardware they need. I think that's not required that often anymore. Also, sometimes, actually, hardware is not easy to come by, as the semiconductor shortages on the world market also influence that a little bit. As I said, for us strategically, it's not a problem, but it just has an impact in terms of non-recurring one-off revenues still being on a very low share, which now basically supports our business models with our recurring revenues being almost in the order of 89% for H1. Okay. All right. Gross margin obviously has developed nicely, which is due to the fact that I just mentioned: higher airtime and lower hardware sales obviously have a nice effect on that. We are now doing so in terms of increasing our technical talent and investing also in the channel, which has increased in higher staff at the end of H1. This has obviously, as you can see, influenced our personal costs. In terms of a percentage of revenues, we're still below last year. As I said, with an overinvestment in technical resources, we even see that towards the end of the year, beginning 2022, it's turning a little bit upwards. In terms of marketing, we've just basically started in Q2 to accelerate investments going forward, especially in H2, you see a lot more of that, partly because, A, we have a new partner program with more partners; B, we have more room to invest, and C, we also have another market we invest in to ramp up. There will be more spending in H2, which obviously then, two quarters or especially two quarters afterwards, you also see that reflected uptick in growth. Selling expenses reflect that we are really focusing on our channel and using that just because it's more sticky and scalable. As I said, we reduce our direct business to practically zero where we can and take partners into everything, which I think in terms of further scalability is an important step. In the overall picture, like in terms of profitability, H1 obviously has a pleasant feel of a positive EBITDA. Some of it is due to investments coming out a little later than we would have wished, also due to, as I said, the pandemic market situation, but it is picking up. It also reflects nicely that our business model is stable in these times, and we just, as I said, would like to invest a little bit more aggressively to increase growth, which you are going to see in H2 actually implemented. All of that together results in our standing by our guidance we gave that in terms of expecting the growth of the customer base between 15% and 17% for the full year, while we think that we may end up a little bit on the lower side of that growth. As I said, we expect the growth to pick up in H2. Recurring revenue is also we expect to be on guidance, and the recurring revenue ratio should also be above 85% and even probably a little bit higher than that, as you can see. With that said, as a summary, as you know, obviously we are in a very interesting market situation with the business communications market being revolutionized, not just by cloud PBX, but especially by the larger move around unified communications and the emergence of different workloads. With our European position, and especially our strong position in markets like in Germany and Austria, we are best positioned to actually take advantage of this long-term migration phase of businesses towards the new communication world and with many new nascent European markets where we have presentations. Our business model allows us to grow massively via having sustainable recurring revenue, which is obviously the beauty of a cloud SaaS business. We own basically the technology platform from the bottom- up and know of the needs of our European customers and, therefore, are actually in control of further developments and further improvements. We can deliver that from our data centers in Germany to the European market. Based on that platform, we can scale our growth further, for which we've developed our strategy. There's not just one level of growth. There are many, because, as I said also, it's not always the number of seats. Sometimes it's also upselling premium solutions on existing seats. There are additional business opportunities we have for both new customers and old customers, which makes this a really interesting long-term play for us. With that, I'll probably pause. I assume we open it up for questions. Thank you very much. Ladies and gentlemen, if you would like to ask a question, please press nine and star on your telephone keypad. In case you wish to withdraw your question, please press nine, followed by star again. Please press nine and star to register for a question. We already have the first questioners in the line. First up is Gustav Froberg from Berenberg. Over to you. Good morning, everyone. Thank you for taking my questions. I just have one, Klaus, if I may. That's just about the investments that you have put in place in Q2 so far this year. I know we've talked about the ramp-up of these investments that's sort of occurring in H2. Of the investments that you have put in place so far this year, could you talk a little bit more about what exactly it is you've done in Q2 so far that you expect will have a positive impact already on seat growth in H2? Okay. I think, if you say it concretely on seat growth, it's basically, A, we started investing more marketing, and B, we have more partners to drive the seat growth. That's the very short answer. Obviously, we've done more investments that may not necessarily already result in seat growth in H2, like ramp-up of technical resources. This is a little bit of a more long-term play. These are the most important ones. Well, yeah, there are many more, but if it's really about H2 impacts, those are the two. Okay, super. No, that's very clear. Thank you very much. Next question comes from Alina Köhler from Hauck & Aufhäuser. The floor is yours. Yeah, good morning. I actually have three questions. The first one is, recurring revenue has been stable quarter-over-quarter, and ARPU came down a little bit. Does this mean that the voice minutes are coming down now? I think you highlighted this in Q1 call that that's your expectation. The second question is, we've seen very strong growth at DTS of more than 33% in H1. What is this driven by? The third question would be, there's funding programs in Germany right now, which are basically covering investments into digitalization projects. I just wanted to see if you can benefit from this or if you think that this hampers some of your growth because it doesn't favor cloud solutions but rather on-prem solutions. Okay. All right. Thank you. For the first one, basically, I assume I thank you, Alina, for the questions. I think the first one you referred to is Q2 versus Q1, I think a little bit. That's right. Yep. Right. Yeah. I think short-term ARPU fluctuations are often driven by actual real lockdown periods. I remember, especially in March, I think we had a very strong visible impact, and it depends a little bit on what geographies are all involved. I think this is not necessarily a long-term trend but short-term fluctuations. I said, long-term, the ARPU from the voice minutes may go down. For that, we continue to develop our premium solutions, for which we have basically upside on the ARPU side. Actually, another large influencer is our channel structure, depending on in what country we are growing more above average in terms of if it's a wholesale or a dealer partner. Regarding DTS, obviously, yes, the business has developed very nicely. It has obviously also to do with airtime; we have a good income from that. We have been able to really sustain the PBX business there, although we launched the new version at the end of Q2, beginning of Q3, the new centrexX 3 new technology version. We have been able to uphold the steady progress on still selling basically old solutions. That has worked out well. We're also massively hiring and ramping up the team there. The integration with the NFON group obviously continues to make progress. The last one, in terms of a funding program, actually, that's a really good question I did not have on the radar. Before I pull something out of my hat, I think I'd rather have to come back to you on that, because I don't think I'm qualified to make a statement in terms of, especially, what market. I think your question was more German-centric. Yes, definitely. where the solutions are actually being deployed. Yeah. I'll try to bite my tongue about the short-term impact of those, usually those government programs on small and medium businesses in Germany, usually. All right. Thank you for your answer. Next up is Knut Woller from Baader Bank. The floor is yours. Yeah. Thank you. Actually, three questions. The first one on the pipe. Can you give some more insight on how more advanced the pipe is compared to prior years that should give us some more confidence in the growth acceleration trials that you cited. You mentioned more partners and that this should drive a growth acceleration already in the second half as well as marketing spend. Some more color here would be appreciated. Secondly, on depreciation, which went up sequentially quite strongly by EUR 0.9 million. Can you share here the reasons for this development? Lastly, for Jan-Peter, two questions. The first one on centrexX 3.0, how do you expect that to drive the growth momentum of DTS AG in the second half and going forward? Regarding the functionality that you still have to develop to be more successful in the large enterprise segment, can you share which functionality you're working on here and when we should expect that to be completed? Thank you. Yeah. Thank you very much for the concise questions. Regarding pipeline H2, obviously I cannot give a quantitative answer, it's actually something we've been working on to get more visibility on, we are actually launching a deal registration program soon in order to increase the visibility and comparability of the pipelines. As I said, we have some wholesale partners where we actually have no visibility in pipelines. Some share, some don't. We don't really have a 100% bulletproof basis to compare. From my calls with the individual countries, I see a pipeline that's continuing to develop, therefore, we are confident that there will be success as we expected. As I said, we just started at the end of mid -Q2, basically to ramp up our investment. Many of those will take a while, with our full marketing power actually hitting at the end of Q3, beginning of Q4. This will have its first impact at the end of the year, also for 2022. This is not, as I said, those sales cycles, especially also when they are for bigger accounts, tend to take a little bit of time. In terms of depreciation, I probably know the answer, but I may just defer this to Petra. I think it's quite easy. We had a lot more activation of R&D efforts in the last period. This will rise in the future, this will be continued. There's a second reason that, due to technical reasons from one of our partners, we had to reduce the useful period, and therefore we had an extra depreciation as a one-off effect, which we don't expect to be repeated. Can you quantify that, please, the effect? It's about that. Just a second, we're looking it up, Knut. No worries. Take your time. You can also send it afterwards if you want. Can I come back to you? Yeah. Knut, maybe let me jump in and answer my question, and either we find the answer by then or we'll hand over the answer later on. That's perfect. Knut, thanks very much for your questions. centrexX 3.0, I believe the question was in terms of expectations of growth. As you know, the centrexX 2.0 was a product, let's put it politically correctly, coming of age. It was not up to the highest standards. Partners knew for quite some time that a new version would be coming out. Obviously what this creates in the partner and then customer area is that they are hesitant to buy the old product. Everyone is looking for the new one now. We are very happy that we got this out there on time. It's a matter of educating partners to fully appreciate the new functions, new functionality, and everything. That is going quite well. The reception that we are having is awesome, to be honest, because the Cloudya platform is obviously a lot stronger and has had a lot of positive developments in the past months and years. We have high expectations for the growth of centrexX 3 in the DTS environment. Hard to quantify when and how exactly. When, especially because the launch is an ongoing process. There are still some things in BSS and the processes and so on to be finished educating, especially the partners, to really speed things up. As I said, everything's on track, everything's on plan. We are expecting the numbers to go up in the second half of this year and then fully launch with the new centrexX 3 spirit in Q4 and next year. Expectations are quite high there. In terms of large enterprise functionality, it's an easy question with a complex answer. I'm not sure whether or not I'm able to give the full picture here. Reason for that, Knut, is there is not the one large enterprise sector. It's really dependent on what type of large enterprises we are looking at. For example, we are already very successfully addressing large enterprises with several thousand and up to 10,000 seats when it comes to companies with a large number of subsidiaries. You know a few of them. We are already addressing those with the feature set that we have. There is not the one feature that is missing for everyone. With all the large enterprises, they are different things. Some need a little bit more power in terms of UC. We're delivering this now. Some need additional functionality in terms of contact center or AI. We are delivering that with new NCC functionality, which is part of our strategy as well. A lot of them are targeting or looking for a new and better administrative functionality, which is something that we are delivering with our new portal, which we're in development for right now. We're going to see the first things of that in the next year. The full functionality in terms of rights management and so on is expected to be coming at the earliest in 2023. There is not the one feature that we need to have, which will allow us to binarily, from one moment to the other, address the large enterprise sector, whatever the large enterprise sector is. It's going to be a slow process, and with every bit of new functionality we're putting in parts of our products, we're going to be able to address more and different types of large enterprises. It's something that you're going to see increase over time and not with a big bang, with a feature being launched in, let's say, Q4 next year. It's going to be a slow, steady rise. If I may come to your question regarding depreciation, the one-off effect was about EUR 800,000. Excellent. Thank you very much. Now we're coming to the next questioner. It is Thomas Coudry from Bryan Garnier & Co. Over to you. Yes, thank you very much for taking my question. Good morning, everybody. Three questions, please. First one, I'd like to come back to your deal in the Italian company on the WebRTC technology. Should we see that move as a defensive move to protect your access to the technology? Will this partnership with the company provide you with a new competitive advantage or new technology products, or whatever? That's my first question. The second one, maybe I misunderstood, I want to make sure. There was a sharp increase in your non-recurring revenues in H1 and in Q2 in particular. However, there are less, let's say, customer seat acquisitions this year than last year. I would assume that your nonrecurring revenue is a proxy of commercial dynamics. How can we explain the difference between the two? My last question, please, is I'd like to get your comments on an important, I would say, deal in the sector over the last two weeks: the acquisition of the company Five9 by Zoom. I'd be interested to have your view on that. It's a very significant acquisition, a significant move to contact centers and calls, actually, versus where Zoom was coming from. Is it very U.S.? Can it have an impact on your customer? Overall, be happy to get your thoughts on that move from Zoom. Thank you very much. Brilliant, Thomas. Jan-Peter here. Let me take the first question, please. Your question was whether or not our deal was intended to be more of a defensive move or, well, let's put it nicely, an aggressive move in acquiring new technology and competitive advantage. I believe the correct answer is both. We have been using the technology of Meetecho for quite some time to build our already in -place Meet & Share technology, and we have been working on our video conference system for quite some time and are happy to be able to put it out in the market later this year. We're already using it internally very successfully with very positive feedback. This was built on, at least a part of that, built on Meetecho technology. Of course, we have a substantive interest in securing this technology and having access to this and making sure nothing happens to this core component of our platform. However, that by far was not the only reason. The Meetecho guys are very advanced. They have wonderful technology, most likely the leading WebRTC specialists out there in the world. This is a field in real-time collaboration software and backend technology that is evolving quite a bit. Basically, every month, whenever Google comes out with a new browser technology or enters some new codecs or whatever, there are new functionalities that you're able to then offer to your customers. To not have to reactively wait on new technologies to come in there and see whether or not the priority of those developers is 100% aligned with our interest. Having the possibility to actively steer the product line to be part of this development and not only be a result of this development, obviously, is going to give us a competitive advantage and is going to speed up things, not so much this year, but in the coming years when we are on top of the UC functionality and video collaboration functionality that we are going to offer at the end of this year, going to enhance this technology. This is a constant enhancement, and in this enhancement, we are going to see a very positive impact due to the Meetecho collaboration. I hope this answers the question. Yes. I would like to answer the question regarding the non-recurring revenues. You said it rightly, it's a proxy and linked with the development of new seats. There are quite often some deviations, and it varies due to hardware demands we have or have not from the one or the other customer. For example, we had a one-off effect here at DTS with a higher hardware demand. It's not that predictable, as the recurring revenues are not that strategically important for us. That's why we are concentrating so much on the recurring revenues. Okay. Thank you. Regarding Zoom's acquisition of Five9, I think that obviously it confirms pretty much, I think, what we talked about in the beginning and also this presentation. The different communication workloads just keep growing together. Many customers require, I wouldn't say integrated, not necessarily integrated solutions, but obviously when they use different workloads, obviously they'd like them to work together. There is positive influence. I think there's a market study that more than 60% of customers prefer their contact center vendor to be the same as their UC vendor. I think this obviously gives credence to this integrated communication strategy that we also have. The multiples applied in this deal may just sound like a small premium to the stock price, but when you look at the revenue multiples, they're just staggering. I think it also illustrates quite a bit that this is like the market's really in a decisive phase and obviously mixes up the role play a little bit with Zoom and former partner RingCentral by throwing down the gauntlet, I think it's called in English. As I said, I think this is just a confirmation of our strategy that you need to play in all the relevant customer workloads, and I think more players who were serious need to play in those. I think that's pretty much what I take away from that. Okay. Thank you very much. All right. At the moment, there are no further questions. If you have any additional questions, please press nine followed by the star on your telephone keypad. There are no further questions. Okay. Thank you, Kapuna. Ladies and gentlemen, if you have any further questions or need more information following this conference call, please do not hesitate to contact me. For now, we would like to say goodbye. Thanks for attending our call today. We wish you a nice further day. Stay healthy, and until next time. Bye-bye. Thank you, everyone. Bye-bye.