Wameja Di Regulatory News (WJA)

23 Nov 2005 07:00

eServGlobal Limited23 November 2005 eServGlobal LimitedAnnual General Meeting23 November 2005 CEO's Address Dear Shareholders, Welcome and thank-you for your time today. I would like to cover our results for the last financial year and touch on someof the important aspects of our recent acquisition. I will then provide youwith an overview of our plan for the current year. Some of you will recall that the plan I outlined when I stood before you lastyear included growing revenue & profitability. We intended to achieve this bybroadening our channels to the market and our product offerings. This planworked. We delivered 33% revenue and over 200% earnings growth in the 2005 fiscal year,compared to 2004. In addition, we have built a sustainable growth platform forthe future. We have built new products and announced new partnerships,partnerships which will form the basis for new eServGlobal references - fromleaders in the telecommunications industry. In the product part of our business we continued to invest heavily in real-timecharging, messaging and NGN solutions. This has produced a stronger marketposition with stronger revenues and improved our ability to penetrate new highgrowth markets like India and Central and Latin America (CALA). For our customers and partners, it means we can solve more problems, with morefocus, than our competitors. Acquisition Update The combination of our business growth and our market strength positioned us forthe transformational acquisition which we have recently completed. We now have 75 customers in 50 countries around the world.We have 500 personnel with offices in 15 countries around the world.Approximately 10% of the world's mobile phone population uses our software.The acquisition complements our plan for the 2006 year, which is to: • Grow revenue & profit• Expand markets• Increase efficiency• Bring a broader range of solutions to our customers Since completing the acquisition, we have identified a number of key synergies,including complementary positions in real-time charging, mobile payments,messaging and NGN network services. Our new, widely deployed, pre-paid recharge capability is a perfect fit with ourexisting real-time charging solutions and convergent billing market position. Our complementary messaging solutions will enable us to pursue the convergentmessaging market segment aggressively. We can unbundle or bundle various components of these solutions which increasesour flexibility and provides our customers with the ability to leverage theirexisting investments. We can now deliver in a service node form-factor whichmeans we can address low-subscriber volume market segments. Our Plan Firstly I will discuss the markets which we are addressing. In mature markets we have seen increasing investment and complexity in servicenetworks, driven by hopes of increasing earnings by driving revenue growth. Inlarge part, this growth has not materialised. The main path to earnings growthor margin preservation for these operators is in fact cost reduction. In developing or emerging markets there is major growth in new subscriberadditions. These subscribers are producing low revenue, in the range of $3 to$4 of ARPU per month. With this level of ARPU, it is clear to all that thetraditional economics that underpin telephony network investment strategies areunsustainable. The economic business cases that supported the development oftelephony to date, when we had high ARPU and high subscriber growth all around,are over. New Network Economics are required to enable operators to make amargin from these subscribers. Happily, the New Network Economics that are essential for operators to make amargin from low value subscribers in emerging markets, can also be utilised todrive cost reduction strategies in mature markets. In summary, we are wellpositioned in telecommunications markets that are returning to growth. We believe that our increased scale and new go to market options will provide uswith improved opportunities for profitable growth. Our objective is to delivershareholder value growth by delivering operational leverage - growing ourrevenues at a faster rate than our costs. Achievement of this objective will be driven by a continuing strategic focus on: • Marketing to installed base of customers - one of the greatstrengths of our company; • Winning new customers with broader integrated product portfolio; • Leveraging our relationships with major partners; and • Realising synergies across our complementary operating geographies,products, distribution channels, customer bases and technologies. Summary The growth we have achieved in 2005 is a credit to all of the people ateServGlobal. They have transformed our business. I am proud to have theprivilege to work with such an outstanding team of experts. We continue to embrace the values of teamwork, achievement, communications andtrust which have helped us reach this point. We are all part of an exciting future in the telecommunications industry and wewill continue our focus on delivering the highest levels of shareholder value inthe future. Patrick McGrory CEO This information is provided by RNS The company news service from the London Stock Exchange