Ceragon Networks Ltd. · NASDAQ:CRNT
Ceragon Networks — Investor Presentation (August 2019)
25 slides from Ceragon Networks's investor presentation, August 2019
Slide 1: The #1 Wireless Backhaul Specialist
THE #1 WIRELESS BACKHAUL SPECIALIST Investor Presentation // August 2019 Proprietary and Confidential
Slide 2: Safe Harbor
Safe Harbor This press release contains statements concerning Ceragon's future prospects that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the current beliefs, expectations and assumptions of Ceragon
Slide 3: Ceragon Snapshot
Ceragon Snapshot • Ceragon is the leading provider of wireless backhaul solutions to mobile GLOBAL SCALE operators and private networks globally +2,000 total customers • 20+ years of technology R&D driving significant barriers to entry; founded in 1996 and headquartered in Tel Aviv, Israel +1,000,00
Slide 4: Ceragon's Business and Leadership Position
CERAGON’S BUSINESS AND LEADERSHIP POSITION Proprietary and Confidential 4
Slide 5: Wireless Backhaul
Wireless Backhaul Critical Technology to Gigabit-LTE and 5G Networks • Wireless backhaul serves as an alternative to fiber-optic networks and a primary solution for network densification • Critical since it is a faster and more cost effective deployment vs. fiber based deployment • Connects approxim
Slide 6: Best-of-Breed Strategy: Sell Customer Value
Best-of-Breed Strategy: Sell Customer Value Seek Best-of-Breed Focused Deals Avoid Bundled/Price Focused Deals • Focus on service providers seeking the best wireless • Avoid end-to-end network bundling, with no specific backhaul solution as main factor for vendor selection vendor selection process f
Slide 7: Largest Specialist Serving the Best of Breed
Largest Specialist Serving the Best of Breed Global Wireless Backhaul Market (2018) Best-of-Breed Market Segment (2018) Others, 6% USD [M] ZTE 2% 4000 Intracom 5% Ceragon, 18% 3500 3000 Aviat, 8% Best of breed 1720 2500 $1.95B 2000 1500 1720 Nokia, 9% NEC, 17% 1000 Bundled deals 500 $1.95B 0 SIAE, 1
Slide 8: Technological Industry Leadership
Technological Industry Leadership Ceragon’s Multicore technology resolves the key challenges associated with wireless backhaul as networks transition to 5G Capacity | Spectrum | Energy | Real-estate 4G evolution to 5G Industry’s only Industry’s only Dual-core solutions Octa-core solutions X4 Capacit
Slide 9: Key to Innovation is Vertical Integration
Key to Innovation is Vertical Integration Enables us to introduce features that keep pace with the evolution to 5G • Chip design Full • Software design Vertical • Hardware design Integration • Systems FIBEAIR IP-20 PLATFORM MULTICORE EVERYWHERE - IN ALL DEPLOYMENT SCENARIOS SDN/NFV Proprietary and C
Slide 10: Disaggregated IP50 wireless backhaul
Disaggregated IP50 wireless backhaul resolves growing 5G challenges A single radio All-outdoor radio / Split mount radio Networking SW Indoor unit with integrated router (hardware with software) Networking standard HW Breaking proprietary hardware-software combinations Separating software from hardw
Slide 11: IP-20 All-outdoor solutions lead the market since 2013
IP-20 All-outdoor solutions lead the market since 2013 Increasing demand for all-outdoor wireless backhaul • Simplified site acquisition • Fast installation and commissioning • Efficient use of limited spectrum 2015 2016 2017 • Super-fast capacity upgrade path Market Ceragon Source: SkyLight Researc
Slide 12: Global Reach and Strong Customer Base
Global Reach and Strong Customer Base • Over 1 million radios installed in over 140 countries North America Europe APAC • Supplier for major global Tier 1 operators Latin America Africa India Revenue by Geography — Last 12 months Asia Pacific, 12% • Presence in all regions Africa,6% • Purchasing Nor
Slide 13: 50% share of best of breed in India
50% share of best of breed in India India subscribers (millions, at end of period) • BIG-3 operators’ net subscriber growth in 2018: 178M 1200 • Aggressive network expansion & densification initiatives due to hyper- 1000 800 competitive market 600 • All-outdoor addresses key challenges at scale: net
Slide 14: Ceragon's Operating Model and Financial Position
CERAGON’S OPERATING MODEL AND FINANCIAL POSITION Proprietary and Confidential 14
Slide 15: Track Record of Execution
Track Record of Execution • Focus on maximizing gross profit dollars (Revenue) (in millions) (Net Income) $400 $40 (371) • Stable, profitable business model (349) (344) $350 (332) $30 (294) $300 (18) $20 (15) (11) $250 (7) $10 $200 $0 $150 (a) -$10 $100 $50 -$20 (-25) $0 -$30 2014 2015 2016 2017 201
Slide 16: Strong Balance Sheet
Strong Balance Sheet • Cash decreased sequentially due to reduced (U.S. dollars in millions) (Unaudited) factoring and higher working capital requirements to meet anticipated delivery a/o Mar. 31, 2019 commitments Cash & cash equivalents 29.8 • No bank debt; $40 million unused borrowing capacity Ban
Slide 17: Characteristics of Operating Model
Characteristics of Operating Model Controllable elements are well-controlled Quarterly Operating Model • Deals accepted based on contribution to gross profit dollars 110 40% • Tendency toward trade-off between revenue and gross margin 100 90 35% • Stringent operating expense control sustained for 2+
Slide 18: The Future is 5G
THE FUTURE IS 5G THE FUTURE IS CLOSER THAN WE THINK Proprietary and Confidential 18
Slide 19: 5G evolution, not a single event
5G evolution, not a single event Today: Gigabit LTE momentum Tomorrow: 5G adoption subscribers >40 countries, >20 operators Gigabit LTE – enhanced mobile service, based on LTE- Advanced-pro standards, enabling “5G broadband” services Source: Qualcomm, 2018 Source: GSMA, 2017 Proprietary and Confiden
Slide 20: 5G amplifies & diversifies wireless backhaul challenges
5G amplifies & diversifies wireless backhaul challenges X5 X100 DEPLOY MORE SITES PROVIDE MORE ENABLE 5G USE-CASES DEAL WITH CAPACITY MASS DEPLOYMENT Proprietary and Confidential 20
Slide 21: Ceragon strategic roadmap – single channel capacity
Ceragon strategic roadmap – single channel capacity 2010 2013 2018 2019 2021 2022 2023 4G 4.5G Gigabit LTE 5G New Radio, 4G Core Network End to End 5G network (5G-NR Non Standalone) (5G-NR Standalone) Microwave 2Gbps 4Gbps 8Gbps 4-42GHz (112MHz) (224MHz) E-Band, V-Band 57-86GHz 1Gbps 2.5Gbps 20Gbps
Slide 22: Formulating a Broader 5G Strategy
Formulating a Broader 5G Strategy Continuously refining both offensive and defensive strategies Technology Fit/Business Risk Analysis New 5G fixed Value Creation/Financial Risk Analysis small cell • Relevance to core competencies backhaul wireless • Time to revenue access • Potential competitive adv
Slide 23: Summary
SUMMARY Proprietary and Confidential 23
Slide 24: Leader in premium segment of the market
✓ Leader in premium segment of the market ✓ Time-to-market advantage with technologically-advanced IP-20 and IP-50 platforms ✓ Competitive strengths provide ability to be selective, obtain major share of highest-value opportunities ✓ Financial stability enables continuous innovation and design-to-co
Slide 25: The #1 Wireless Backhaul Specialist
THE #1 WIRELESS BACKHAUL SPECIALIST Proprietary and Confidential
Ceragon Networks — Investor Presentation (August 2019) on 6ix