Adtran Networks SE · XETR:ADV

Adtran Networks — ADVA Optical Networking — Q2 2012 Earnings Presentation

22 slides from Adtran Networks's earnings presentation, Jul 19, 2012

  1. Slide 1: Q2 2012 IFRS Financial Results

    Q2 2012 IFRS Financial Results July 19, 2012 Martinsried/Munich, Germany

  2. Slide 2: Disclaimer

    Disclaimer FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements with words such as “believes”, “anticipates” and “expects” to describe expected revenues and earnings, anticipated demand for optical networking solutions, internal estimates and liquidity. These forward-look

  3. Slide 3: Business Update and Outlook

    Business Update and Outlook Brian Protiva Chief Executive Officer 3 © 2012 ADVA Optical Networking. All rights reserved. Confidential.

  4. Slide 4: Q2 2012 in Review

    Q2 2012 in Review • Year-on-year revenue growth to record EUR 85.9 million, at the upper end of guidance and +10% vs. Q2 2011, driven by higher demand for Ethernet transport solutions for mobile backhaul and enterprise access applications • Pro forma operating income at EUR 6.8 million or 8.0% of re

  5. Slide 5: Prospects for Q3 2012

    Prospects for Q3 2012 • Market growth across all business areas, in contrast to recent overall market trends* • Enterprise networks: strong spending driven by innovative enterprise network technology in a broad range of verticals • Ethernet access: major incremental demand, largely due to heavy depl

  6. Slide 6: Business Segment Overview

    Business Segment Overview Revenues 2011:* EUR 310.9 million 30% 30% 40% +6.6% vs. 2010 Market Growth 2011-2014:** +14% +15% +13% 13% CAGR Addressable 18% 12% 71% Market 2011:** EUR 4.1 billion ENTERPRISE ETHERNET CARRIER NETWORKS ACCESS INFRASTRUCTURE Well-balanced and diversified mix of market segm

  7. Slide 7: Enterprise Networks: Drivers in Data Center Connectivity

    Enterprise Networks: Drivers in Data Center Connectivity • Dramatically growing Peak requests 262 capacity demand in data centers 200k+ per second of enterprises and communication providers 102 • Increased adoption of cloud 40 14 services creates security 2.9 Q4 06 Q4 07 Q4 08 Q4 09 Q4 10 challenge

  8. Slide 8: Enterprise Networks: Efficient Data Center Connectivity

    Enterprise Networks: Efficient Data Center Connectivity Amsterdam Internet Exchange: 100G metro for data center connectivity 100G Data center A Data center B FSP 3000 • First to market with 100G Metro • Highest density DWDM system on the market with innovative power management and minimum heat dissi

  9. Slide 9: Ethernet Access: Drivers in Mobile Backhaul

    Ethernet Access: Drivers in Mobile Backhaul • Internet Protocol-based 7 Radio Access Networks 6 5 make Ethernet primary choice Subscribers (billions) 4 for mobile backhaul 3 • Real-time applications and 2 increased mobility demand 1 0 low-latency architecture 08 09 10 11 12 13 14 15 Mobile Mobile Br

  10. Slide 10: Ethernet Access: Unconstrained Mobile Backhaul

    Ethernet Access: Unconstrained Mobile Backhaul FSP 150CC FSP 150EG-X Demarcation Aggregation Service Edge • Integrated, best-in-class synchronization architecture FSP 150 • Long-term supplier to BT into the world’s largest network for wholesale Ethernet access • Multi-million USD deployment for inte

  11. Slide 11: Carrier Infrastructure: Drivers in Optical Infrastructure

    Carrier Infrastructure: Drivers in Optical Infrastructure 70 $5 • Massive data centers 60 Price per port per Gbps (US$k) have changed 50 $4 Exabytes/month (trillions) traffic patterns 40 $3 30 $2 • Content now originates 20 $1 10 from many sources and 0 $0 challenges network dynamics 2009 2010 2011

  12. Slide 12: Carrier Infrastructure: Software Defined Networking

    Carrier Infrastructure: Software Defined Networking Agile Optical Networking • Extremely scalable and flexible optical layer • Forward looking control and management concepts • Integration with higher network layers (e.g. Juniper) Scalability, flexibility and automation for ultimate performance 12 ©

  13. Slide 13: How we ADd VAlue

    How we ADd VAlue OPERATIONAL EXCELLENCE Profitable THOUGHT growth LEADERSHIP FOCUS ON GROWTH MARKETS Loyal customer Differentiated technology Expanding opportunities ADVA Optical Networking is a thought leader in developing intelligent network infrastructure for high-growth markets 13 © 2012 ADVA Op

  14. Slide 14: Financial Results

    Financial Results Jaswir Singh Chief Financial Officer & Chief Operating Officer 14 © 2012 ADVA Optical Networking. All rights reserved. Confidential.

  15. Slide 15: Quarterly IFRS Revenues and Pro Forma Profitability

    Quarterly IFRS Revenues and Pro Forma Profitability Revenues and Pro Forma Gross Profit*** (millions of EUR, % of revenues) +5%* +11% * +2%* +5%* -2%* 77.8 79.3 83.4 81.7 85.9 +17%* +8%* -3%* +9%* +4%* 29.7** 30.9** 33.3** 32.3** 35.1** (38.1%) (39.0%) (40.0%) (39.5%) (40.9%) (43.0%) (43.5%) (43.9%)

  16. Slide 16: IFRS Profitability

    IFRS Profitability EUR million Q2 2011 Q3 2011 Q4 2011 Q1 2011 Q2 2012 Pro Forma Operating Income 3.5 5.5 7.4 4.5 6.8 (4.5%) (6.9%) (8.9%) (5.5%) (8.0%) Operating Income 2.4 4.4 6.7 3.5 5.9 (3.1%) (5.6%) (8.0%) (4.3%) (6.9%) Net Income 0.8 9.7 8.7 4.0 5.1 (1.1%) (12.3%) (10.4%) (5.0%) (5.9%) Diluted

  17. Slide 17: Cash and Net Liquidity

    Cash and Net Liquidity EUR million Cash & Cash Equivalents Financial Liabilities and Lease Obligations Net Liquidity 69.9 65 50 40.8 35 20 5 -10 -25 -29.1 -40 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 20

  18. Slide 18: Working Capital Metrics

    Working Capital Metrics Days Sales Outstanding (DSOs) Days Payable Outstanding (DPOs)* Inventory Turns* 100 6.0 5.8 90 5.6 5.6 80 5.4 70 5.2 5.0 60 56 4.8 50 54 4.6 40 4.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011

  19. Slide 19: Revenues Per Region

    Revenues Per Region Quarterly Development of Regional Revenues (millions of EUR, % of total) EMEA Americas Asia-Pacific 85.9 83.4 81.7 77.8 79.3 2% 6% 6% 6% 5% 29% 32% 38% 38% 38% 63% 56% 69% 56% 56% Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 EMEA remains most significant revenue contributor, Q2 2012 r

  20. Slide 20: IFRS Consolidated Cash Flow Statement

    IFRS Consolidated Cash Flow Statement EUR million Q1 2012 Q2 2012 Net cash provided by operating activities 13.6 12.7 Net cash used for investing activities -8.3 -8.6 Net cash provided by (used for) financing activities 1.0 -0.3 Net effect of foreign currency translation -1.4 2.1 Net change in cash

  21. Slide 21: Guidance Q3 2012

    Guidance Q3 2012 • Revenues between EUR 82 million and EUR 87 million • Pro forma operating margin between 4% and 8% of revenues* • ADVA Optical Networking will continue to perform detailed quarterly reviews of the expected business development in respect of all intangible assets, including capitali

  22. Slide 22: Thank you

    Thank you Investor Relations Wolfgang Guessgen t +49 89 89 06 65 940 wguessgen@advaoptical.com www.advaoptical.com

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