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CLX Communications AB (publ) A N N U A L R E P O R T 2 0 1 5 - 2 0 1 6 , 1 8 M O N T H S
ABOUT
CLX Communications
CLX Communications (CLX) is a leading Ever since the company was founded, CLX
global supplier of cloud communications has delivered profitable growth. In the ex-
services and solutions for enterprises and tended financial year 2015-2016 this trend
mobile network operators. Mobile communi- sustained with organic growth of 107 percent,
cations services from CLX make it possible sales of SEK 2,339.9 million and reported
for enterprises to communicate globally with profit after tax of SEK 111.6 million. The Group
their customers and connected devices – IoT is headquartered in Stockholm, Sweden, and
(Internet of Things) – swiftly, securely and has a p resence in an additional 20 countries.
cost-effectively. CLX is a global market leader for cloud
CLX’s solutions enable business-critical communications solutions.
communication worldwide through mobile The shares of CLX Communications are
messaging services, voice services and IoT listed on Nasdaq Stockholm – XSTO: CLX.
connectivity services.
HQ STOCKHOLM
1,000+ 80+ 15 billion+ Listed on
Enterprise Operator Annual API Nasdaq
customers customers transactions Stockholm
At time of printing
Please visit us on:
www.clxcommunications.com
CLX COMMUNICATIONS ANNUAL REPORT 2015/16
The annual report is published in Swedish and English. In case of any differences between
the English version and the Swedish original text, the Swedish version shall apply.
HQ STOCKHOLM, SWEDEN
SEKM 2,334 SEKM 5,600+ 309 31 100,000+
Net sales 2015/16 Market cap* Employees Offices in 22 Developers
countries
Seattle Montreal
New York
San Francisco
Atlanta
Dallas
Miami
Guatemala City
Bogota
Quito
Lima
CLX was founded with a vision of becoming the world’s largest and lead-
ing provider in the market for mobile cloud communications. Following the
2016 acquisitions of Mblox Inc. and Sinch AB and the acquisition of Xura
Secure Communications GmbH in early 2017, we have quickly positioned
ourselves as a global leader in cloud communications.
Johan Hedberg, CEO CLX Communications AB (publ)
Stockholm
Gothenburg
Kalmar
Lund
Warsaw
London
Canterbury Prague Kiev
Paris Munich**
Dortmund
Madrid Istanbul
Baghdad
Dubai
Bangalore
Kuala Lumpur
Singapore
Sydney
Melbourne
* Approximate market cap when the annual report was produced.
** Munich is included in the CLX Group as of February 2017.
2015/16 in brief
• Net sales amounted to SIGNIFICANT EVENTS DURING THE PERIOD
SEK 2,333.9 million (844.4).
• The CLX share was listed on Nasdaq Stockholm Mid Cap on 8 October 2015.
• Net sales increased by 176 per-
The introduction price was SEK 59.
cent compared to previous fiscal
year. Organic growth amounted • CLX acquired Mblox Inc. on 11 July 2016. At the time of the acquisition, Mblox
to 107 percent. was one of CLX’s largest competitors, particularly in the USA. Through the
acquisition, CLX has taken a leading position in the cloud communications
• EBITDA amounted to SEK 161.9
market.
million (93.1).
• CLX acquired Sinch AB on 20 December 2016. Sinch is a leading developer
• Adjusted EBITDA amounted to
of cloud-based voice communications solutions.
SEK 238.0 million (89.1).
• EBIT amounted to SEK 112.5
SIGNIFICANT EVENTS AFTER THE END OF THE PERIOD
million (88.7).
• Net profit for the period amount- • On 16 February 2017, CLX acquired Xura Secure Communications GmbH,
ed to SEK 111.6 million (52.9). one of the leading mobile messaging services providers in Germany, with a
market share above 30 percent. Xura has a strong position in the banking,
• Diluted earnings per share
logistics and aviation sectors, where it has been delivering solutions including
amounted to SEK 2.56 (1.53).
secure login for online banks, notification services for logistics companies and
check-in services for airlines for several years.
KEY FINANCIAL DATA
2015/16* 2014/15
SEK MILLION 18 MON 12 MON
Net sales 2,333.9 844.4
Gross profit 642.3 251.9
Gross margin 27.5% 29.8%
EBITDA 161.9 93.1
EBITDA margin 6.9% 11.0%
EBIT 112.5 88.7
EBIT margin 4.8% 10.5%
Profit for the year 111.6 52.9
Diluted earnings per share, SEK 2.56 1.53
Cash flow from operating activities 107.6 94.9
Net debt 368.6 8.9
Debt/equity ratio, multiple 2.3 0.1
Definitions, see page 48
NET SALES, SEKM EBITDA, SEKM
2500 200
2,334
162
2000
150
1500
93
100
78
1000 844 64
606
479 50
500
0 0
2012/13 2013/14 2014/15 2015/16* 2012/13 2013/14 2014/15 2015/16*
* 1 July 2015 to 31 December 2016 is an extended financial year of 18 months. The reason is that CLX´s financial year from 1 January 2017 will coincide with the calendar year.
CLX COMMUNICATIONS ANNUAL REPORT 2015/16 3Contents
3 2015/16 in brief 43 Balance sheet Parent company
6 Message from the CEO 44 Statement of changes in equity
Parent company
10 Market
45 Cash flow statement
16 The CLX journey Parent company
18 Operational divisions 46 Multi-year review Consolidated
20 Customers and use cases 48 Definitions
22 Technology 49 Notes
24 Employees 75 Certification and signatures
26 Sustainability 76 Auditor's report
30 Management report 80 Corporate governance report
38 Income statement Consolidated 85 Board of directors and Group
management
39 Balance sheet Consolidated
87 Auditor’s report on the corporate
40 Statement of changes in equity governance report
Consolidated
88 Annual general meeting, addresses,
4 1 Cash flow statement Consolidated terms and abbreviations
42 Income statement Parent company
4 CLX COMMUNICATIONS ANNUAL REPORT 2015/16CLX COMMUNICATIONS ANNUAL REPORT 2015/16 5
MESSAGE FROM THE CEO
From regional private enterprise
to global, public company
The enterprises that use our services to
handle critical information, every second
CLX is creating the communications solutions of the of the day, every day of the year, include
future. We make communication easy by offering
some of the world's largest banks, air-
enterprises and developers tools and services to in- lines, healthcare providers and leading
tegrate communication in their business processes. global internet companies. Only imagi-
Partnering with CLX makes it possible for enterprises nation sets the limits to how enterprises
can integrate and use our services in their
to rapidly and securely integrate scalable communica-
business.
tions solutions based on text messaging, voice, video We leverage our unique network of
or IoT (Internet of Things) in their operations. direct connections to hundreds of mobile
network operators to make it possible for
enterprises to deliver information to cus-
tomers, employees and devices. With
precision and quality, we ensure the right
information reaches the right recipient in
the shortest time possible. Through our
network of mobile operators, we cur-
rently reach more than five billion mobile
phones and function as a global, cloud-
based operator for enterprise customers.
CLX was founded with a vision of
becoming the world’s largest and leading
provider in the market for mobile cloud
communications. Following the 2016
acquisitions of Mblox Inc. and Sinch
AB and the acquisition of Xura Secure
Communications GmbH in early 2017,
we have quickly positioned ourselves as
a global leader in the cloud communica-
tions market.
6 CLX COMMUNICATIONS ANNUAL REPORT 2015/16JOHAN HEDBERG, CEO CLX COMMUNICATIONS ANNUAL REPORT 2015/16 7
MESSAGE FROM THE CEO
CLX was founded with a vision of becoming
the world’s largest and leading provider
in the market for mobile cloud-based
communication, with solutions for mobile
messaging, voice, security and IoT – Internet
of Things.”
FOUR FACTORS FOR SUCCESS tion, put us in a leading position in the sions are made. A strong position in the
There are four strong arguments for why market. United States will also power growth in
we have what it takes to continue our other markets.
growth journey: A SUCCESSFUL YEAR WITH TWO
STRATEGIC ACQUISITIONS In December we acquired Swedish tech
The extended financial year of 2015- company Sinch AB. The acquisition of
1. The market is growing and compa- Sinch is a strategic step, enabling us to
nies around the world are increasing- 2016 was marked by continued strong
and profitable growth, while we success- provide a more complete product offering
ly and rapidly integrating A2P (applica- to our customers. To an increasing extent,
tion-to-person) communication into their fully completed two strategic acquisitions.
In July 2016, we acquired Mblox Inc. our customers want to work with fewer
business systems to effectively communi- suppliers and the Sinch product portfolio,
cate with their customers and employees. With this acquisition, we were able to
advance our position in the important in areas including voice and video com-
American market while achieving sub- munications, complements our own range
2. Cloud communications platforms of services.
are gaining ground and will increasing- stantial cost synergies.
ly become the primary solution for how This was strategically important to us
THE MARKET FOR CLOUD
companies build communications into for the following reasons:
COMMUNICATIONS SERVICES
their business systems. It is cost-effec- • The development of cloud communica- Over the past ten years, the ever-smarter
tive, scalable and flexible. We began with tions solutions is driven mainly from the mobile phone has transformed the way
text message-based communications and USA. The acquisition takes us closer people make decisions and how compa-
now offer a complete range of services for to the companies and trends that are nies communicate and build relationships
voice, video and IoT. shaping the market. with their customers. What we have seen
so far is only the beginning of an acceler-
3. Size and scalability. Our business • We gained a solution for cost-effectively
ating evolution.
model is scalable and we have the muscles selling our services online, making it
Nowadays, we take online shopping,
to be active in the continued consolidation possible to address the SME market.
banking services, hotel reservations and
of the market. • Size matters. Winning the biggest social networks for granted. Business-
contracts and meeting the demands es that have not created user-friend-
4. Deep industry expertise. We have imposed by large companies and govern- ly services, that do not give customers
deep industry expertise and we own and ment agencies takes resources, capac- the option to get information or imme-
control the technical platform required ity and persistence. With the acquisition diately buy products and services via
for our deliverables – and we have the of Mblox we took a step from being just a internet-based solutions in their mobile
lowest production cost in the industry for supplier to being increasingly viewed as phones are struggling to compete with
the services we provide. a strategic partner. Many multinational next-generation enterprises.
These factors, combined with a strong corporations are headquartered in For our customers, this is not a matter
financial position and a skilled organiza- the United States, where global deci- of “oh, it would be nice to have a mobile
8 CLX COMMUNICATIONS ANNUAL REPORT 2015/16MESSAGE FROM THE CEO
solution.” It is a matter of survival. Global ness and their skill at translating brilliant
digitalization is pushing companies to ideas into sales, growth and profitability.
rapidly lower their costs and adapt their As we close the books for our first finan- FACTS
value propositions to a new market cial year as a listed company, we have
situation – which is creating opportuni- delivered powerful growth, both organi- JOHAN HEDBERG
ties for CLX. cally and through acquisitions, and have Chief Executive Officer
taken a position as a leading global pro-
2017 AND BEYOND… vider of cloud communications services. Born: 1973
CLX’s sales have multiplied many times Although the early days as a listed com- Employee since: 2008
without compromising profitability or pany have been the most exciting time Education: Graduate Engineering
quality. Our financial position is resilient, in my career, the journey has only just Degree, KTH Royal Institute of
giving us the opportunity for sustained begun. With great confidence, I am look- Technology, Stockholm
growth. We have a strong customer base ing forward to working with the entire CLX
Johan is a co-founder of CLX and
that includes some of the world’s most team as we write the next chapter in the
has more than 15 years of industry
exciting enterprises in the new digitalized story of the little company from Kalmar experience, including positions at
world. that has grown into a global titan in only Ericsson and Mblox. Johan lives
Our customers include some of the ten years. with his family in Atlanta, USA.
most famous brands in the world in sec- My sincere thanks to our customers,
tors that are rapidly adopting new com- employees, directors and owners.
munications technologies, as well as new
and innovative enterprises that are turn-
ing old industries and beliefs about what
is possible upside down. The common Stockholm, 28 April 2017
denominator among these enterprises is
not only that they are adopting new com- Johan Hedberg
munication technology faster, but that, in President and CEO
partnership with us, they are driving the
development of new mobile services.
Being the CEO of CLX Communi-
cations is both demanding and very
enjoyable. Demanding because we
do business in a rapidly changing mar-
ket. Enjoyable because I have the best
co-workers I could imagine, in terms of
their industry expertise, their innovative-
CLX COMMUNICATIONS ANNUAL REPORT 2015/16 9MARKET
The cloud communications
market
Growth in the market for cloud commu-
nications services remains strong. The
The market for cloud communications services has grown main elements of the market are:
at an accelerated rate in the past few years. Independent • Messaging services like SMS, MMS,
analysts are convinced that large companies will change text-to-speech and the recently
their purchasing patterns for communications services launched RCS.
• Voice services like Flash Calling and
from traditional software to cloud communications solu-
voice communications in applications
tions, based on precisely the components they need to and mobile apps.
address their challenges and create greater competitive- • Video services and app-to-app video
ness. Growth continued across all sub-markets in 2016. calls.
• IoT – Internet of Things, which comprises,
a world of connected devices and tech-
nical equipment, programmable SIM
cards and machine-to-machine commu-
nications (M2M).
MARKET SIZE
According to market research firm IDC,
CLX's market is expected to grow by
10 CLX COMMUNICATIONS ANNUAL REPORT 2015/16MARKET
DIRECT CONNECTIONS OPERATORS WITH FAST
CLX’S PLATFORM/ TRANSACTIONS
SOFTWARE
200+
CLX has more than 200
80+
80+ operators have installed
10,000
CLX handles up to
direct connections to mobile CLX’s platform 10,000 transactions per
network operators second
about 23 percent a year, reaching USD In short, cloud communications are all The Forrester Consumer Technographics
28.9 billion in 2019. In 2015, sales in the about the next generation of communi- North American Online Benchmark Sur-
market were approximately USD 12.8 cation. Enterprises, researchers, ana- vey (Part 1) data from 2016 showed that
billion. The calculations include solu- lysts and visionaries all agree that the messaging services based on SMS, etc.,
tions for messaging (SMS, MMS), voice absolute majority of the services enter- are largely replacing, or are expected to
communications and video, as well as prises offer are going to happen in mobile replace, other existing communication
security solutions including identification devices. These communications between channels, especially email. According to
in banking transactions and IoT. enterprises and people – A2P (applica- the study, consumers in North America,
The market is roughly divided into tra- tion-to-person) – will be a prerequisite for for example, prefer to use SMS-based
ditional software and hardware solutions survival. services when reliability and speed are
on the one hand and cloud communica- Historically speaking, only the truly paramount.
tions services on the other. According to major enterprises have been able to The trend is clear. The market for
IDC, the segment of the communications afford these solutions, because com- business-to-consumer communications
market based on cloud API solutions is munications between businesses and solutions is still growing while the mar-
alone expected to be worth around USD consumers required huge investments ket in which CLX operates is growing
10 billion in 2019, compared to 2015, in hardware, software and other costly considerably faster, at the expense of
when the market generated only about infrastructure. last-generation tech solutions.
USD 222 million in total. CLX is one of the companies leading An IDC report from March 2016 shows
the migration from the rigid and cost- that the overall market for cloud commu-
KEY TRENDS IN THE MESSAGING ly solutions of yesterday to the modern nications will grow by an average of 8 per-
MARKET solutions of the digital era based on cloud cent per year until 2019, while the mar-
In recent years, the communications mar- communications. Today, enterprises are ket share for CLX's main market, cloud
ket has become the core or spine of the integrating communications solutions in communications services based on API
new and modern society that is emerging the form of advanced API protocols in technology, will increase from 1 percent
all around us. We have seen how enter- their existing business systems. CLX is in 2014 to 25 percent in 2019.
prises have created opportunities for new one of few high-tech firms that can pro- According to Mark Winther, group vice
and revolutionary products and services vide this type of protocol to every enter- president, Telecom, at IDC, Cloud API
based on communications. As consum- prise in the world along with direct con- messaging platforms are working as a
ers, we rely on communications services nections to more than 200 mobile network catalyst since they are open to users for
as the backbone of our everyday lives. operators worldwide. test and development and the develop-
CLX COMMUNICATIONS ANNUAL REPORT 2015/16 11MARKET
The market for cloud-based voice
applications is expected to grow from USD
94 million in 2014 to USD 3.7 billion in 2018.”
ment platforms of the new era make it Ovum predicts that the number of video thing in common – to reach their full
possible to build and test new applica- calls, both for person-to-person and potential and deliver value, they all, no
tions in hours. conference calls, is going to increase by matter what, have to connect, collect
32 percent over the next four years. and communicate data without regard to
KEY TRENDS IN THE VOICE Business models for WebRTC (an open physical or technical boundaries.
COMMUNICATIONS MARKET and entirely free standard for communi-
Most enterprises have already integrated cation via web browsers) are still under VISUALIZE A WORLD OF
traditional voice services in their opera- development. WebRTC allows providers CONNECTED DEVICES
tions and many have not considered the of cloud communications services to offer Connected cars and body-worn fitness
possibilities to develop new and compet- software and infrastructure to application gadgets are already becoming familiar
itive services. Thanks to powerful and developers and enterprises that prefer IoT devices – but IoT is also coming into
programmable API protocols from com- not to independently build the capacity our lives through the energy industry and
panies like CLX, it is now so easy to inte- required for large-scale use of WebRTC. retail, for example.
grate new and innovative services based Telecom operators and enterpris-
on various types of voice-based services es are increasingly adopting WebRTC- COLLECTION OF REAL-TIME DATA
in enterprise applications that voice calls based platforms to more easily provide There has been some lightening of reg-
to traditional landline and wireless devic- customers with advanced communica- ulatory burdens in this area – and it may
es will be an option only for consumers tions services, such as web-based video become possible in the future for drones,
who prefer to communicate that way. calling and screen sharing. Studies for example, to deliver vast quantities of
In a modern information society where including Ovum’s 2017 Trends to Watch: data. Another example of data gathering
customers’ and consumers’ communi- Communications Services Report show is CLX's joint project with Top Fuel, where
cations patterns are constantly evolv- that development and roll-out of WebRTC IoT solutions from CLX are helping Top
ing, large enterprises will not be able is likely to contribute to powerful growth Fuel monitor their fuel tanks.
to afford to stick to traditional technology in video-based communications starting
with the attitude that “things are fine as in 2017. DIGITAL TRANSFORMATION AND
they are.” If they do, they are likely to IOT ARE A COMMON CAUSE
be left behind by companies using KEY TRENDS IN THE IOT MARKET The digital transformation of big busi
for example WhatsApp and Slack as Ericsson predicts that the number of IoT nesses will be driven by information and
communications channels. connections will grow by an average of data collected from machines, technical
According to a forecast by market 20-30 percent a year for the next five devices and analytical tools for process-
research firm Ovum, minutes of use for years. The number of connected devices ing the collected data. Connecting data
OTT VoIP and video calling will grow at is expected to increase from 400 million from things and equipment is only the first
the expense of conventional mobile and in 2016 to 1.2 billion in 2022. CLX already part of IoT-based production. The magic
fixed voice services. has the technology and expertise to meet happens when the analytics transform
all of these needs on a global basis. data into decision support. CLX already
KEY TRENDS IN THE VIDEO has the expertise and experience that
COMMUNICATIONS MARKET A FEW EXAMPLES OF TRENDS CIO’s need to navigate in a whole new
Video calls have become an increasing- IN IOT AND HOW THEY CAN world.
ly common feature of consumers’ lives CREATE OPPORTUNITIES FOR
thanks to smart phones with, video call- ENTERPRISES A NEW AGE DEMANDS NEW
ing applications like Facetime, WhatsApp Although the following examples rep- SKILLS
and Skype, at the same time as broad- resent various types of businesses and An estimated quarter of a million IoT
band capacity has increased and camera challenges, all IoT solutions have one applications will be developed in 2020.
phones improved.
12 CLX COMMUNICATIONS ANNUAL REPORT 2015/16Naturally, this presents opportunities for create a completely new kind of health-
talented developers and companies like care, perhaps especially in this area,
CLX that already have the expertise and focus on security will be essential. CLX
technology to support this development. thoroughly understands the IoT field
Buyers of communications solutions will and has the experience and technology
be confronting new challenges, which in required to assure compliance with future
turn will affect the need for skilled employ- regulatory requirements for privacy and
ees and the training they need. CLX is a security.
valuable partner in corporate skills devel-
opment to enable a more connected world.
PERSONAL PRIVACY AND
SECURITY
IoT is going to entail fundamental changes
and create huge advantages for enter-
prises and individuals, but this develop
ment will also intensify demands on secu-
rity aspects. For example, IoT is likely to
CLX COMMUNICATIONS ANNUAL REPORT 2015/16 13MARKET
For companies, SMS is still the cheapest,
most reliable and most widely available
mobile communication channel for reaching
out to customers and employees.”
Pamela Clarke Dickson, Ovum Research
TRENDS IN CLOUD COMMUNICATIONS SERVICES
MARKET CONSOLIDATION on selling a single communication chan- to-use cloud APIs, developer-friendly
The market is undergoing continuous nel, such as voice, SMS or OTT, have communication products similar to SaaS
consolidation, and there is a high level of developed and expanded their activities (Software-as-a-Service), with new pay-
activity. Mergers and acquisitions will lead to offer multiple channels and products as-you-go models and no long-term bind-
to a gradual reduction in market fragmen- to take advantage of economies of scale, ing contracts.
tation, with fewer players and a number their infrastructure and their global sales This trend is particularly relevant for
of large global companies competing for teams. small and medium-sized enterprises,
a rapidly growing market. CLX is currently one of the few provid- which were previously unable to purchase
CLX is one of the most active players ers that can meet this broad need. And telecommunications services since they
in the ongoing market consolidation, in with over 200 direct connections with were complex to implement, costly and
part through the acquisitions of Mblox and operators all over the world, CLX is the obstructed by commercial or regulatory
Sinch in 2016. CLX will continue to hold market leader in cloud communications. barriers.
this position.
TRADITIONAL TELCOS ARE THE RACE FOR THE NEXT BIG
EXPANDING NUMBER OF MOVING TO THE CLOUD THING
COMMUNICATION CHANNELS The more traditional telcos are develop- Finally, there is an ongoing race to devel-
Companies active in the cloud commu- ing and transitioning to cloud services. op and deliver products for the next
nications market that previously focused They are also starting to introduce easy- generation of communications services
THE VALUE CHAIN FOR ENTERPRISE CLOUD COMMUNICATIONS
1 Enterprises
2
Outbound traffic
Service and application providers
Inbound traffic
3 Cloud communications services providers
4 Mobile network operators
5 People (enterprise customers and employees) and connected devices
= flow of communications
14 CLX COMMUNICATIONS ANNUAL REPORT 2015/16MARKET
and IoT. To an increasing extent, enter- book Messenger, WhatsApp, WeChat romised major benefits over traditional
p
prises that offer cloud communications and Viber. SMS. In early 2017, CLX announced that
services are also going to offer data traf- Some believe that these new ecosys- the company had entered into a strategic
fic for IoT devices. This is a logical step tems might disrupt traditional communi- partnership with Google, which wants
since these companies can make use of cations, but enterprises that offer cloud to be able to offer its customers a future
the existing wireless infrastructure that communications services see them as product portfolio of messaging services
they already use for voice, SMS and MMS an opportunity to generate growth. Many based on the new RCS standard.
communications. The potential for com- of them will also open their platforms in
panies like CLX to offer mobile connec- order to create scope for increased prof-
tivity for IoT has become much greater itability. For CLX, this presents a huge
through uniform standards for things like opportunity to enter these currently
embedded SIM cards. closed ecosystems and offer services that
customers are willing to pay for.
INNOVATION IS CREATING NEW Finally, the entirely new RCS (Rich
ECOSYSTEMS Content Service) messaging service has
Innovation has always pushed the bound- shown signs of maturing and is grow-
aries of technology and in recent years ing rapidly, thanks in part to the Google
has created user-friendly services that RCS cloud. In February 2017, Google
integrate new communication channels, announced a program for early access
such as video applications like Face- to RCS capability for businesses and
Sources:
Ovum – 2017 Trends to Watch: Communications Services – Pamela Clark Dickson – 21 December 2016
Ovum – WebRTC: An Emerging Revenue Opportunity for Telcos – Pamela Clark Dickson – 20 August 2015
Ericsson – Ericsson Mobility Report – June 2016
Forrester – Data Consumer Technographics North American Online Benchmark Survey (Part 1), from 2016
Ovum – Global Communications Outlook: 2016-21 – Pamela Clark Dickson, Gareth Sims, Kamalini Ganguly, Neha Dharia, Ronan de Renesse, Matthew Howett, 9 January 2017
Ovum – Ovum’s Digital Economy 2025: The Future of Communications
IDC – Worldwide Application-to-Person Messaging 2015-2019 Forecast: The Power of Cloud API Messaging Platforms by Mark Winther – March 2016
Ovum – Chat apps set to disrupt the mobile app store – Neha Dharia – 1 February 2017
Ovum – Mobile Messaging Traffic and Revenue Forecast: 2016-21 – Neha Dharia 25 November 2016
GSMA – Messaging as a Platform – Enabling Conversational Commerce v1.0 – 16 December 2016
Forrester – Executive Q&A: Boost your Chatbot IQ by Ian Jacobs, Andrew Hogan, Michael Facemire and Julie A. Ask – 21 February 2017
Forrester – Vendor Landscape: Mobile Messaging Platforms – Michael Facemire and Julie A. Ask – 16 March 2017
EY – Global telecommunications study: navigating the road to 2020-2015
CLX – Internet of Things: Last Mile Connectivity Options Explained – February 2017
CLX COMMUNICATIONS ANNUAL REPORT 2015/16 15THE CLX JOURNEY
CLX year by year
2008 2009 2010 2014
CLX IS FOUNDED CLX ACQUIRES INTEGRATION OF CLX ACQUIRES
CLX is founded by six SYMSOFT SYMSOFT VOLTARIS
people with long and The company is growing Symsoft is successfully CLX acquires Voltaris’s
extensive experience with fast. The first office abroad integrated. mobile messaging busi-
telecom and internet ser- is opened in the UK and ness in the US and Canada.
vices with companies like CLX now has more than The acquisition gives CLX
Ericsson and Mblox. The 100 customers worldwide. 2013 access to unique opera-
vision is to simplify global CLX acquires Symsoft INTERNATIONAL tor agreements in North
communications, with initial AB, a supplier of software America and key customer
EXPANSION
focus on making it easier and services to mobile contracts. Powerful growth
Continued international
for enterprises to com- network operators. continues and CLX now has
expansion. The company
municate effectively with The acquisition strength- more than 500 customers.
opens its tenth interna-
their customers via mobile ens CLX's technical The company’s CEO and
tional office and CLX now
messaging services. infrastructure and relation- co-founder Johan Hedberg
has local presence in North
ships with mobile network wins Ernst & Young’s Entre-
America, South America,
operators. In parallel, CLX preneur of the Year Award.
Europe, the Middle East,
launches a business model CLX expands its enter-
Asia and Australia.
using the same technology prise service portfolio with
to offer solutions to enter- the introduction of voice
prises and operators. applications.
NASDAQ
SYMSOFT
VOLTARIS CALEO
Founded
2008
Acquisition Acquisition Acquisition
2009 2014 and IPO
2015
16 CLX COMMUNICATIONS ANNUAL REPORT 2015/16THE CLX JOURNEY
2015 2016 2017
CLX ACQUIRES GLOBAL LICENSE CLX ACQUIRES SINCH AFTER THE END OF
CALEO AGREEMENTS WITH CLX acquires Sinch AB, a THE REPORTING
CLX acquires Caleo Tech- ERICSSON AND SAP leading supplier of cloud PERIOD, CLX
nologies and expands the The CLX Operator Divi- communications services, ANNOUNCED THAT
product portfolio. The sion closes agreements primarily voice-based. IT HAD ACQUIRED
acquisition means CLX can with Ericsson and SAP. The acquisition strength- XURA SECURE
offer complete solutions to The agreements enhance ens the CLX product COMMUNICATIONS
small and virtual operators. CLX's capacity to attract portfolio in voice services GMBH
The CLX Tier One Super the world’s largest telcos. and CLX can now offer Xura Secure Communica-
Network comprises tech- Ericsson licenses SMS soft- globally leading solutions tions GmbH is a leading
nical and commercial rela- ware solutions for mobile to enterprises in all three provider of cloud com-
tionships with more than network operators and SAP mobile communications munications services in
100 mobile network opera- licenses firewall solutions channels: text messaging, Germany. Its customer
tors all over the world. to protect mobile operator voice-based solutions and base includes some of the
networks. data for IoT. largest banks, logistics
CLX LISTED ON companies and airlines in
NASDAQ CLX ACQUIRES the country.
The CLX share was listed MBLOX The acquisition gives
on Nasdaq Stockholm Mid CLX acquires Mblox and CLX a leading presence in
Cap on 8 October. CLX takes a leading role in the Germany.
gains access to capital in ongoing market consolida-
order to drive consolidation tion. Headquartered in the
in the segments where the US, Mblox Inc. is one of the
company operates. largest messaging service
providers in the world.
With the acquisition, the
CLX Enterprise Division
more than doubles its sales
and the company strength-
ens its global presence,
especially in the US, UK
and Australia.
The acquisition also rein-
forces the global CLX Tier 1
Super Network, which now
includes more than 200
mobile network operators.
ERICSSON MBLOX XURA SECURE
COMMUNICATIONS
SAP SINCH GMBH
2016 Acquisition Acquisition
2016 2017
CLX COMMUNICATIONS ANNUAL REPORT 2015/16 17OPERATIONAL DIVISIONS
CLX operates through two
complementary business divisions
The Enterprise Division targets the corporate market. The
Operator Division is a leading supplier of software and services
to mobile network operators all over the world. Both divisions
offer their customers products and services based on CLX’s
proprietary communications platform and software. During
the 18 month reporting period that ended 31 December 2016,
the Enterprise Division accounted for 89 percent of CLX’s net
sales and the Operator Division for 11 percent.
ENTERPRISE DIVISION
The CLX Enterprise Division combines landline and mobile phones, initiate Enterprises and
programmable APIs and cloud services phone-to-phone or app-to-app calls and developers
to create, in partnership with its exten- connect incoming and outgoing voice
sive network of mobile network opera- calls to their applications and systems.
tors, opportunities for enterprise cus- Examples of how voice APIs are used
tomers and developers to easily build include flight and hotel reservations, Cloud services
global communications, including mes- where customers can call a central reser- providers and partners
saging, voice, video services and data vations service directly from an app while in verticals
connectivity, into applications, business relevant customer information is simulta-
processes and IoT devices. neously transmitted digitally for smooth Cloud APIs
and efficient reservations and customer
Offering relationships. PROGRAMMABLE APIS
The CLX Enterprise Division’s offer-
ing includes APIs for mobile messaging APIs for verification services
services from enterprises to customers, Application developers and enterprises
Mobile Voice Telephone
primarily SMS, but also MMS and USSD. can use phone number and identity verifi-
messaging numbers
These make it possible for enterprises cation services to quickly verify that a per-
to send and receive customized text son’s phone number is correct and that
messages to and from their customers, the person is who they claim to be. This
employees and connected devices world- is usually managed with a PIN that is sent Information Infrastructure
wide, fast and easily. by text message or voice call. services management
Examples of how these APIs are used:
APIs for video services
MOBILE CONNECTIVITY FOR
Banking and finance sector Developers and enterprises can use
IoT
To reach and communicate with custom- these APIs to easily add high-qual-
ers via the channel they prefer, improve ity video services to an existing app or IoT – M2M – MVNO
and streamline customer service and website. – Mobile data
enhance security by implementing veri-
fication and/or two-factor authentication. Data connectivity
CLX provides mobile connectivity ser-
Retail and brands online vices for IoT. The service makes it easy 1,000+
To increase sales through relevant mes- to connect IoT devices to the internet, mobile network
sages to customers at precisely the right regardless of location.
operators
moment and enhance security by imple- CLX has more than 3,000 active enter-
menting verification and/or two-factor prise customers including Air Canada,
authentication. L’Oréal, Panasonic, Microsoft, Viber,
Renault, Uber, Badoo, Truecaller, Snap-
APIs for voice services deal, Rebtel and Domino’s Pizza. 5+ billion people
These APIs enables enterprises to acti- and devices
vate calls via the cloud from an app to
18 CLX COMMUNICATIONS ANNUAL REPORT 2015/16OPERATIONAL DIVISIONS
OPERATOR DIVISION
The CLX Operator Division (Symsoft) is The Operator Division’s product portfolio 4. Prevent fraud
a partner to more than 80 mobile network simplifies many of the greatest challenges Symsoft’s firewall solution for SMS and
operators in more than 40 countries. The mobile network operators are facing. SS7, along with filter solutions, help
division offers innovative, stable and scal- mobile network operators prevent fraud.
1. Transition to providing cus-
able software and services to customers tomers of mobile network oper- Our products are updated in real-time
in the areas of IoT platforms, real-time ators mainly digital services and with a specific update service so that all
BSS, VAS, fraud prevention solutions for enabling service innovation to vulnerabilities are quickly detected.
revenue retention and full-service solu- sharpen competitiveness 5. Thrive as a virtual operator
tions for virtual operators (MVNO). Symsoft contributes here with products Symsoft provides mobile virtual net-
Solutions can be provided as local like Real-Time Business Support Sys- work operators (MVNO) a full-coverage
installations for operators, as managed tem (BSS), which contains tools for cre- solution: voice, messaging, mobile data
outsourcing services or as cloud services ating high-quality customer experiences services and more. We create short time-
in public or private clouds. for end users, and Integrated Policy and to-market through a complete MVNO
The Division creates value for its cus- Online Charging, which provides the flex- solution that is included in our MVNCloud
tomers by making them more compet- ibility and control required for mobile net- offer.
itive in terms of shorter time-to-market work operators to create differentiated
(TTM), access to new revenue streams, products in a highly competitive market. 6. Monetize IoT
the opportunity to prevent fraud and sub- Symsoft can help mobile network opera-
2. Reduce operating costs in the tors launch IoT products for their existing
stantially lower costs of ownership and
operators’ base networks business customers via the same under-
operation. CLX offers a wide range of flex-
Symsoft offers consolidated, leaner and lying software that the Enterprise Division
ible usage options and several different
more efficient SMSC and MMSC prod- uses for cloud communications services
levels of service.
ucts that can replace costlier systems and in IoT.
In 2016, the division achieved a cus-
those about to be phased out. Symsoft’s customers include Virgin
tomer satisfaction score of 86 percent,
while 96 percent of the customer base 3. Generate revenues from whole- Mobile, 3, Mobile One, Telefonica, Reb-
regards the Operator Division as a long- sale SMS tel, Telia and Tango.
term partner. Other highlights in 2016 Symsoft’s SMS platform (SMSC) and rev-
were that Symsoft was the first supplier enue retention solutions make it possible
in the world to bill a cash-card subscriber for mobile network operators to capture
for a VoLTE call and we won the world’s revenues for traffic for which fees are not
largest multi-market contract for SS7 currently charged.
signaling.
Each transit stage
causes delays and
reduces security,
Tier 3 control and protection
Network of data.
Enterprises Operators,
Transit
and MNOs 5+ billion
developers Tier 2
people and
Network devices
Comprehensive commercial,
operational and technical
integration.
Transit
Tier 1
Network
CLX COMMUNICATIONS ANNUAL REPORT 2015/16 19CUSTOMERS AND USE CASES
USE CASES
Banking Healthcare
• Confirmation • Patient monitoring
• Notifications • Voice authentication
• Two-factor authentication, one-time • Appointment reminders
pin codes
• Passwords
E-commerce Industry and public
• Authentication sector
• Two-factor authentication • Utility meter reading
• Virtual phone numbers • IoT connection
• Human resources planning
Travel Transport
• Flight and ticket status • Process monitoring
• Local phone numbers • Delivery confirmation
• Sponsored data
Connected cars Media
• Service notification and • News notifications and updates
downloads • Sponsored data
• IoT connections • Data from commercial
• Always local connection advertisements
20 CLX COMMUNICATIONS ANNUAL REPORT 2015/16CUSTOMERS AND USE CASES
SELECTION OF CLX CUSTOMERS AND PARTNERS
Enterprises
Operators
CLX COMMUNICATIONS ANNUAL REPORT 2015/16 21TECHNOLOGY
The communications platform
The proprietary, software-based CLX communications plat- from CLX's enterprise customers and is used in the operations
form can handle message, voice and mobile data traffic and is of more than 80 mobile operators.
extremely reliable and thoroughly tested in environments that Through its communications platform, CLX offers its enter
require 99.999 percent availability. CLX handles all traffic that prise customers efficient direct access to about five billion
its Enterprise Division customers generate in its own commu- mobile phone subscribers and connected devices all over
nications platform. The same platform is also sold to and used the world. The communications program is easily accessed
by mobile network operators in their businesses, generating through secure and versatile APIs. The company has a sub-
revenues for the CLX Operator Division. CLX thus uses the stantial number of direct uplinks to mobile network opera-
same infrastructure and technology in its Enterprise Division tors and provides its enterprise customers direct access to a
operations as the Operator Division sells to its customers. global mobile network. Powered by the CLX communications
This achieves substantial and advantageous synergies, such platform, this global mobile network enables cost-effective,
as shared costs of R&D, support and operation, but also gen- high-quality, secure and scalable services and solutions for
erates excellent relationships and stronger trust in CLX in the mobile-based business communications. CLX's communica-
mobile industry. tions services can lower investments, costs and barriers in
The platform is modular and scalable, which creates flexibil- connection with an enterprise’s launch of a global communi-
ity of use while offering comprehensive functionality. In 2016, cations service.
the platform managed about 15 billion billable transactions
ENTERPRISE DIVISION OPERATOR DIVISION
The platform is used to The platform is sold
enable the enterprise as software or
offer “as-a-service”
CLX COMMUNICATIONS PLATFORM
MOBILE CONNECTIVITY
VOICE APPLICATIONS A2P MESSAGING:
FOR IOT
• Enables use of voice • Send text messag- • Enables communications
services in business es (SMS) to and from to and from business
applications business applications applications and systems
• E.g. temporary phone and systems via mobile data
numbers • E.g. “Reply to check in” • E.g. connected cars
22 CLX COMMUNICATIONS ANNUAL REPORT 2015/16TECHNOLOGY
THE CLX TIER 1 SUPER NETWORK™ – WHAT IS IT AND HOW DOES IT STRENGTHEN
OUR MARKET POSITION AND OUR CUSTOMER VALUE PROPOSITION?
The CLX Tier 1 Super Network Direct connections and relationships are Establishing these direct connections is
important because they produce both no easy task. It takes complex techni-
comprises more than 200
commercial and performance advant cal integration, contract negotiations and
direct commercial relation-
ages. That gives CLX a competitive high start-up fees. It has taken CLX more
ships and technical connec- edge that sets us apart from the compet- than ten years to build up this network
tions with the world’s largest itors. CLX benefits from the lowest possi- and we are still adding new links: about
mobile network operators ble cost by buying capacity directly from 35 in 2016 alone. Mobile network opera-
(MNO). It reaches five billion the recipient subscribers’ mobile network tors can sometimes be reluctant to take
people and devices. These operators. In addition, direct connec- on new partners, because it generates
direct connections with more tions are more reliable, cut queue times higher administrative costs but no new
than 200 MNOs give CLX a and increase security, because mess revenue. This is a major barrier for new
major competitive advantage ages and calls never leave the CLX net- entrants to the market.
work. As a result, CLX offers enterprises The need for direct connections is
that is difficult for others to
the best level of service in the business. going to increase as more mobile net-
achieve.
Another advantage is that CLX has direct work operators choose to install SMS
access to subscribers’ operators and can firewalls (from the CLX Operator Divi-
swiftly diagnose and correct faults, with sion or another supplier) in their mobile
no need to deal with a long chain of third networks, because the firewalls only let
parties and intermediaries. through messages delivered via direct
connections.
CLOUD COMMUNICATIONS PLATFORM
Our cloud communications The platform is available via developer- Our industry-leading platform has one
friendly APIs for cloud-based applica- of the highest levels of service in the
platform is based on the same
tions as well as APIs based on industry business. We have the highest deliv-
software developed by the
standards (such as SMPP). We make it ery performance with the lowest queue
Operator Division and is used easy for developers to integrate with our times while handling more than one bil-
by more than 80 mobile net- platform by giving them software devel- lion API transactions per month from six
work operators worldwide. opment kits (SDK), code examples and continents. The CLX platform is linearly
guidance. Combined with our e-com- scalable and works no matter how many
merce capability, this means enterprises customers connect.
can get online fast and easily, without The platform is optimized and totally
having to talk to a salesperson. adapted for our Tier 1 Super Network of
The platform is placed in a geograph- more than 200 mobile network operators,
ically redundant set-up in both the US which ensures that all signals from the
and the EU with complete error-tolerant mobile networks are used to optimize all
redundancy that ensures zero-downtime connections.
service to customers even if a problem Last but not least, we take security and
should arise in a data center. If custom- regulatory compliance extremely serious-
ers require their data to be held within ly. Our data centers are certified under
the USA or the EU, we can accommo- PCI and ISO 27001. We perform regular
date that as well. penetration tests and have a full-cover-
age continuity plan.
CLX COMMUNICATIONS ANNUAL REPORT 2015/16 23EMPLOYEES
Our people
To us, a strong company culture is a key prerequisite for suc-
cess. The culture is inevitably affected by the relatively large
Working at CLX means coming every day number of acquisitions we have made. But the essence of
to a workplace where passion is a main in- what makes us CLX is so strong that we have maintained its
gredient – something we are very proud of! vibrancy through structural changes and acquisitions.
We are energetic, pragmatic and humble. We value and reward our employees’ deep expertise in their
And we get things done. Working for us, as a fields and we have developed a rigorous recruitment process
to ensure that we attract and select the top talents. We devote
truly global company, means having the free-
a great deal of time to selection and discussion with potential
dom and independence you need to succeed. candidates. We are very picky and put a lot of energy into
We constantly challenge ourselves and each interviewing applicants. The point of it all? We want to make
other to be the best at what we do. We moti- sure this is the start of a long and mutually rewarding relation-
vate and encourage our people to be the best ship.
they can be, every single day. We also believe in We do business in more than 30 countries and together our
maintaining a good work/life balance by mak- people speak more than 40 languages at the native speaker
ing it possible to relax, be ourselves and enjoy or professional level. That means we can often talk to our cus-
the workday and the challenges it brings. tomers in their own language. And that is only one of the com-
petitive advantages that diversity brings – we are convinced
that diversity in every respect generally creates success.
24 CLX COMMUNICATIONS ANNUAL REPORT 2015/16Our people are
hand-picked,
world-class
communications
experts – they are
here to help our
customers!”
CLX COMPANY VALUES
Be the trusted partner Be cost-conscious Listen and learn
Provide solutions pro- Be smart, act smart. Drive Be open, humble and learn
actively, always exceed value creation with a culture to continuously improve.
customer expectations. of frugality.
Embrace and drive change It's one global network Empower others
Be agile, flexible and act Think big and act local. Share knowledge and give
fast. Think ahead and drive We are part of a global guidance to feed creativity. We
change. ecosystem.
grow and succeed together.
EMPLOYEES EMPLOYEES AND CON-
SULTANTS BY COUNTRY NUMBER NUMBER
At 31 December 2016, Australia 2 Malaysia 1
CLX had 309 employees, Canada 9 Poland 12
of whom 249 were men, Colombia 2 Singapore 1
working across more Spain 3
Czech Republic 2
than 30 countries.
Ecuador 2 Sweden 156
France 3 Turkey 3
Germany 1 Ukraine 1
Greece 1 United Arab Emirates 9
Guatemala 1 United Kingdom 39
Hungary 1 United States 52
CLX COMMUNICATIONS ANNUAL REPORT 2015/16 25SUSTAINABILITY
Sustainability management
at CLX
SUSTAINABILITY MANAGEMENT • AA1000
AT CLX • UN Global Compact 10 Principles
CLX shall run its business CLX has established a Code of Conduct • GRI
responsibly with considera
that applies to all companies in the
tion for the environment, Group. The Code requires compliance For the second year in a row, Symsoft
society, customers and em-
with the Ten Principles of the UN Global was awarded the Gold CSR medal by
ployees. The company aspires Compact, which sets out how businesses EcoVadis, a CSR agency, in 2016. Gold
around the world should approach is the highest CSR recognition level that
to steadily reduce the envi-
human rights, labor law and workers’ EcoVadis awards. Symsoft received the
ronmental impact of its op- medal for the environmental, social and
rights, the environment and corruption.
erations. Generally speaking, CLX allocates resources, and will ethical aspects of its business and the
since the aim of CLX’s busi- continue doing so, to nurture employee award is an important acknowledgment
ness is for users of the com- health, safety and social welfare in the of Symsoft’s ongoing sustainability ef-
pany’s products and services workplace. This also applies to others forts. The Gold recognition level means
to communicate virtually to who are affected by the company's op- that EcoVadis considers Symsoft among
a greater extent. CLX there- erations. the top-ranked 3.3 percent in its industry.
by helps to reduce the use of The company endeavors to uphold
high standards for employee conduct STAKEHOLDERS
paper, which is good for the
in relation to how the company does CLX's key stakeholders are customers,
environment. CLX’s products employees, suppliers, industry players,
business – and CLX expects the same
and services also help re- shareholders and society as a whole.
approach from its business partners.
duce the need for travel and CLX is committed to having a healthy CLX strives to maintain fruitful dia-
transport in a v
ariety of ways, business in terms of environmental impact. logue with its stakeholders and commu-
including
delivery of cloud And, it goes without saying, the company nicates with them in the following ways:
services. does not tolerate corruption in any form. Customers
CLX supports the organization Hand- The company’s communications with
Customer benefit is number in-Hand, which is working to eradicate customers are mainly direct, through
one for CLX and in recent poverty through job creation. meetings, email and phone calls. A cus-
years the company has been tomer satisfaction survey is performed
SYMSOFT every year in which CLX asks its cus-
ranked the best A2P supplier
CLX's subsidiary Symsoft, which consti- tomers what they think about the com-
in the market. tutes the company’s Operator Division, pany and what it delivers. The results
is a signatory to the UN Global Com- of the latest survey were enthusiastic.
pact. Accordingly, Symsoft publishes an The survey showed, for example, that
annual Communication of Progress re- 95 percent of the respondents think their
port in which it describes its progress in account manager at CLX listens to them,
the relevant areas. The next report will reacts to their needs and provides accu-
be published on the website during the rate information.
first half of 2017. Symsoft supports the ROCCO, a consulting firm, performs a
following initiatives: survey of operators every year. CLX was
• EICC Code of Conduct voted the best A2P provider in both 2015
• GeSI (Global e-Sustainability Initiative) and 2016. In fact, the only category in
• EICC-GeSI Extratives Working Group which CLX was not voted one of the three
• iNEMI (International Electronics best in the industry was “Brand Recogni-
Manufacturing Initiative) tion,” which could be interpreted to mean
• OECD Due Diligence Guidance that CLX is the world’s best-kept secret!
for Responsible Supply Chains of CLX's subsidiary Symsoft was ranked
Minerals from Conflict-Affected and No. 1 SMS Firewall Vendor by ROCCO
High-Risk Areas in 2016.
26 CLX COMMUNICATIONS ANNUAL REPORT 2015/16SUSTAINABILITY
In 2016, for the second
year in a row, Symsoft
was awarded the Gold CSR
medal by EcoVadis for
the environmental, social
and ethical aspects of the
business. The award are
an important acknowledg-
ment of Symsoft’s ongoing
sustainability efforts.”
Employees happy to share their knowledge, both Shareholders
Employee health and wellbeing is crit- internally and externally. The company CLX demonstrates responsibility to its
ically important to CLX. The company has developed a rigorous recruitment owners by working to maximize value
communicates with employees through process, which has proven successful within the framework of laws, regula-
face-to-face meetings, email, phone, when it comes to recruiting the right peo- tions and norms. The company reports
etc. ple. CLX has more than 300 employees to its owners by publishing interim and
CLX performs an employee satis- in more than 30 locations around the annual reports and by holding general
faction survey twice a year. Happily world, where more than 40 languages are meetings.
enough, the latest survey showed that spoken – diversity is a success factor for Society
the company is above average com- CLX! CLX makes its best to ensure that the
pared to other companies in our indus-
Suppliers company’s interactions with government
try with regard to most of the parame-
CLX communicates with its suppliers agencies, the media and the rest of
ters measured. One of several areas of
on a daily basis – through face-to-face society are managed in accordance with
strength is our employees’ sense of free-
meetings, email, phone, etc. generally accepted practice.
dom, both when it comes to organizing
CLX communicates with all stakehold-
their own work, but also the freedom to Industry players
ers indirectly through the media.
express their opinions. In 2016, MNOs (Mobile Network Oper-
CLX believes the company culture is ators) ranked CLX the “Leading Tier 1
a key prerequisite for success. CLX val- Global A2P SMS Messaging Provider”
ues deep expertise and employees are for the second consecutive year.
CLX COMMUNICATIONS ANNUAL REPORT 2015/16 27You can also read
