Slide 1: FY 2020 annual results
FY 2020 annual results Investor presentation March 2021
Slide 2: Speakers
Speakers Didier Brédy Dmitri Pigoulevski Chairman - CEO CFO 2
Slide 3: Disclaimer
Disclaimer This presentation has been prepared by Ekinops. This presentation is not for purely indicative. It does not constitute an offer or invitation for the sale or onward distribution. Neither the whole nor any part of the information in this purchase of securities or any of the businesses or a
Slide 4: We provide innovative telecommunications solutions to service providers for layers 1, 2 and 3
We provide innovative telecommunications solutions to service providers for layers 1, 2 and 3 1 Optical transport over fibre optic cables LAYERS 2 Switching / Ethernet services 3 Routing / IP services 2020 revenue: 92.8m€ Staff: 460 • 2018: +14% growth – 12.4% EBITDA • Half in R&D • 90+% software en
Slide 5: Ekinops Portfolio
Ekinops Portfolio Manager (NMS, Director) Services (SD-WAN, VNFs) Compose Middleware (OneOS6 LIM) Solutions for Software Defined Networks Software Hardware Ekinops360 OneAccess WDM,OTN Data & L1 Voice Routers Ethernet Device L2, L3 Optical Transport Solutions for metro / long-haul / .... Devices for
Slide 6: The Partner of Service Providers
The Partner of Service Providers Half of the top 30 service providers are customers 1/3rd of the top 100 Shipped ~3 million CPEs OneAccess: #3 brand in our segment Half of Ekinops360 installed-base in the USA 6
Slide 7: Activity & Highlights
ACTIVITY & HIGHLIGHTS “HE BKINOPS
Slide 8: Strong commercial performance in a disrupted market
Strong commercial performance in a disrupted market ⚫ FY revenue stable at €93 million: a performance above 93.5 92.8 that of the market 84.2 ⚫ -0.8% nominal ⚫ +0.2% at constant exchange rates 34.3 ⚫ Strong momentum in the main strategic areas ⚫ Optical transport: OTN solutions, catalyst for WDM pro
Slide 9: Revenue Breakdown by Region (FY 2020)
Revenue Breakdown by Region (FY 2020) EMEA North France Asia Pacific (excl. France) America 37% 37% 17% 9% vs. 33% vs. 38% vs. 17% vs. 12% FY 2019 FY 2019 FY 2019 FY 2019 Solid business with EMEA sales down 2% Business stable in this region, Sales down very encouraging flat at constant currencies gr
Slide 10: 2020 Top10 customers
2020 Top10 customers % revenue Change Areas 2020 vs. 2019 ⚫ +13% growth of Top10 customers Customer #1 France 22% +14% Customer #2 France 7% +6% Customer #3 EMEA 5% +107% ⚫ Rebound for customers #1 and #2 (French) after a decline in 2019 Customer #4 EMEA 4% -4% Customer #5 APAC 4% +371% Customer #6
Slide 11: 2020 commercial highlights
2020 commercial highlights ⚫ Optical transport: First commercial win for the OTN Switching Technology EMEA ⚫ Deal with a major provider of telecommunication and digital solutions in EMEA: upgrade of an existing optical transport network from 10G to 100G ⚫ Optical transport: Adamo deploys Ekinops 200
Slide 12: Other 2020 highlights
Other 2020 highlights ⚫ Launch of Compose, a new suite of Ekinops software products ⚫ Compose enables operators to expand their service portfolio with software defined networks (SDN) solutions ⚫ Compatible with third-party white-boxes and VNFs (Virtualized Network Functions) ⚫ Appointment of our new
Slide 13: FY 2020 Key Financials
FY 2020 KEY FINANCIALS “HE BKINOPS
Slide 14: 2020 gross margin rate above the target range
2020 gross margin rate above the target range Gross margin rate (in % of revenue) 55.9% 55.1% 55% 53.4% Target range 51.1% 50.0% 49.9% 50% 49.0% 2014 2015 2016 2017 2018 2019 2020 ⚫ Gross margin rate of 55.1%, up 1.7 point ⚫ Strict control of production costs ⚫ Successful upmarket strategy: new solu
Slide 15: FY20 P&L (1/2)
FY20 P&L (1/2) ⚫ Limited increase of €2.2 million year-on-year in operating expenses €m - IFRS - Audited 20191 2020 Var. ⚫ R&D: + €3.4 million Revenue 93.5 92.8 -1% ⚫ €1.2 million of D&A charges (o/w €0.8 million due to the OTN acquisition) Gross margin 49.9 51.1 +3% ⚫ €1.4 million due to the expans
Slide 16: FY20 P&L (2/2)
FY20 P&L (2/2) €m - IFRS - Audited 20191 2020 Var. EBITDA2 15.0 14.8 -1% ⚫ Slight net increase of €0.8m in non-cash % of revenue 16.0% 15.9% expenses Net depreciation, amortization and provisions (2.1) (2.7) ⚫ + €0.7 million amortization charge due to OTN Amortization charge – Technologies & PPA (5.
Slide 17: FY20 Cash Flow
FY20 Cash Flow €m - IFRS - Audited 20191 2020 ⚫ Cash flow before taxes and net borrowing costs: Cash flow before taxes & net borrowing €13.8 million, up 11% 12.4 13.8 Change in operating working capital (0.1) 6.1 ⚫ Working capital increase mainly due to the Other items of operating working capital y
Slide 18: Net Cash of €18.1 million at December 31, 2020
Net Cash1 of €18.1 million at December 31, 2020 €m - IFRS - Audited 12/31/20 Cash & cash equivalent 49.6 ⚫ €21.9 of bank loans, o/w €12.0 million “PGE” (French state-guaranteed loan) and Financial liabilities 31.6 €0.5 million loan under the PPP (United States) o/w bank loans 21.9 o/w conditional ad
Slide 19: Balance Sheet
Balance Sheet €m - IFRS - Audited 12/31/191 12/31/20 €m - IFRS - Audited 12/31/191 12/31/20 Non-current assets 83.9 77.6 Shareholders’ equity 86.5 90.9 o/w goodwill 28.7 28.3 Financial liabilities 18.6 31.6 o/w intangible assets 34.3 27.2 o/w bank loans 9.8 21.9 o/w right-of-use assets 6.2 5.3 o/w f
Slide 20: Capital Markets Snapshot
Capital Markets Snapshot1 ⚫ Shareholding (current) ⚫ Shareholding (fully diluted) ⚫ Stock market data 25,614,322 shares 26,917,669 shares ⚫ ISIN: FR0011466069 ⚫ Ticker symbol: EKI 4.3% ⚫ Stock price: €6.46 12.5% 11.9% 9.0% ⚫ Market capitalization: €166m (comp. B) ⚫ Daily average liquidity: €465,000
Slide 21: Outlook
OUTLOOK “HE BKINOPS
Slide 22: Market drivers
Market drivers Digital adoption Cloud & Edge Service providers ⚫ Flexible, distributed ⚫ Network core: strengthen the ⚫ 5B individuals with at resources for optical layer least 1 mobile device today on-demand usage ⚫ Edge: bring compute power and telecom resources closer to 25B IoT devices in ⚫ Real
Slide 23: Evolution that will fuel our growth
Evolution that will fuel our growth 1 Bandwidth Explosion and Optimization 2 SDN, SD-WAN & Virtualization 3 5G: More Traffic, More Virtualization Edge Computing: Convergence of Access Functions 4 and WAN/Cloud Services into the Edge Network 23
Slide 24: Market context
Market context ⚫ Positive signals for the beginning of the year 2021… ⚫ Operators’ investment projects are encouraging ⚫ Service providers are again entertaining new solutions and new vendors ⚫ But too early to declare a market recovery given the prolongation of the health crisis ⚫ No return to pre-
Slide 25: 2021 financial targets
2021 financial targets Revenue Gross margin EBITDA Raising the guidance to EBITDA guidance: Long-term ambition: 52% - 56% Between 12% & 16% double-digit growth while continuing to invest in thanks to upmarket & Target to be confirmed mid-2021 software strategy innovation and business development We
Slide 26: Thanks
Thanks Ekinops SA 3 avenue Blaise Pascal, 22300 Lannion, France www.ekinops.com
Slide 27: Ekinops Product Portfolio: Brands
Ekinops Product Portfolio: 3 Brands Clients Telecom operators, service providers, entreprises Network management and Markets Metro & Longhaul Edge & Access virtualization CWDM/DWDM products Transponders & Muxponders Ethernet Access Devices Virtualization & VNFs Solutions ROADMs Data & voice enterpri
Slide 28: Ekinops Optical Transport Solutions
Ekinops Optical Transport Solutions Compose Manager 1RU 1RU + 1RU 1RU Layer 1 + 1RU White Box Transport Modular Transport & OTN Switching 28
Slide 29: Ekinops Branch Access Solutions
Ekinops Branch Access Solutions Compose Alliances Compose ProServ Compose Manager & OneManage Compose Services Ekinops OneOS6 Built-in or Ekinops VNFs 32 certified 3rd Party VNFs Compose Middleware Branch Office Data Routers Branch Voice + Data Routers ➢ OneAccess OVP ➢ Dell VEP Mid-Range Data Route
Slide 30: Company Milestones
Company Milestones 2003 2010-12 2015 2017 2019 Ekinops formed 100G 1 RU backbone 200G metro access Acquisition of Acquisition product products fronthaul OneAccess of OTN Launch of 1st multi- solutions technology service routers (voice & Acquisition of WAN Netconf/Yang pCPE data) optimization SDN int
Slide 31: Global Reach
Global Reach Sales Outreach Sales Offices & Representation R&D and Offices Empowering next-Generation networks over 70 countries 31
Slide 32: Ekinops SA
Ekinops SA 3 avenue Blaise Pascal, 22300 Lannion, France www.ekinops.com