Slide 1: Growth and Profit - Q3 2014 Presentation
napatech GROWTH AND PROFIT Q3 2014 PRESENTATION NOVEMBER 2014 HENRIK BRILL JENSEN, CEO
Slide 2: Financial Highlights Q3 2014
— napatech“ FINANCIAL HIGHLIGHTS Q3 2014 Invoiced USD sales increased by 7% compared to Q3 2013 Revenue in the period Q1-Q3 2014 of 134.0 MDKK EBITDA in Q3 2014 was 5.1 MDKK = 3% decrease compared to same period of 2013 =» Increase from 4.4 MDKK in Q3 2013 Revenue in Q3 2014 at 44.8 MDKK EBITDA marg
Slide 3: Quarterly revenue growth YoY
*YoY is the growth of current quarter compared with the same quarter one year earlier
Slide 4: Cash Flow Q3 2014
CASH FLOW Q3 2014 napatech“ 1,000 DKK Q3’14 Q3’13 Net cash flow from operating activities 2,872 4,020 Investments in product development (8,017) (5,543) Net cash used in investments activities (8,915) (6,869) Issue of shares 203 0 Net cash flow from financing 78 (47) Net decrease in cash & cash equi
Slide 5: Q3 2014 Increase in Revenue
napatech* Q3 2014 INCREASE IN REVENUE Invoiced Sales / Revenue Growth (YoY) Influencing factors: » Overall market situation is still challenging with obvious quarterly fluctuations in received orders from Revenue Growth our customers » Revenue affected by a combination = of push out of customer proj
Slide 6: Gross Margin - Continued Improvements
GROSS MARGIN — CONTINUED IMPROVEMENTS Gross Margin Margin development » Transition towards higher speed products » Operational excellence and improvements » Change in customer mix = It is our ambition to utilize the strong gross margin to enhance — our business performance 70% » The longer term gros
Slide 7: EBITDA Margin - Positive Development
napatech* EBITDA MARGIN — POSITIVE DEVELOPMENT EBITDA Margin Q3 2014 EBITDA margin » EBITDA is primarily influenced by 30% revenue » Gross margin increase has 25% positive impact ° » Increased sales and marketing costs, investing according to plan in 20% future growth 15% 10% 5% 0% L Q3'13 Q4'13 Qit
Slide 8: Regions Affected by Different Factors Compared to Q3 2013
napatech“ REGIONS AFFECTED BY DIFFERENT FACTORS COMPARED TO Q3 2013 Q3'14 Revenue Growth Geographical split » North America on recovery trend 40% but are still seeing some delays compared to expectations. It is | important to notice that NAM revenue is 80% of the total revenue » EMEA continues to be
Slide 9: Recent Events and Shareholder Status
napatech RECENT EVENTS AND SHAREHOLDER STATUS
Slide 10: Recent Recognitions and Events
RECENT RECOGNITIONS AND EVENTS = Napatech 100 Gigabit Accelerator was awarded Gold Winner in 3 different categories by Golden Bridge Awards » Napatech has been named Danish Technology Firm of the year 2014 » Napatech has joined the European Telecommunications Standard Institute (ETSI) to contribute
Slide 11: Revenue growth by low-end and high-end
60% 40% 20% 0% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 -20% -40% -60% Low-end: High-end Total revenue DKK
Slide 12: Top Shareholders Oct 2014
napatech™ TOP 20 SHAREHOLDERS 31 OCT, 2014 Shareholders 1 - 10 Shareholders 11 - 20 Investor Type Country (%) Investor Type Country (%) Verdane Capital VIII Ordinary Denmark 22.2 DTU Invest rep. ved Sympion Ordinary Denmark 2.0 Northzone IV K/S Ordinary Denmark 22.0 Northzea Management Ordinary US 1
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Slide 14: Target customer segments
Enterprise Enterprise Security Mngt. Telecom Operators Financial services Cloud and Data Center services E-commerce and Media Infrastructure and Defense
Slide 15: Capturing New Business Opportunities
napatech“ CAPTURING NEW BUSINESS OPPORTUNITIES » The organizational change creates focus, scalability, and new opportunities, that will secure more parallel and commercial focused activities: » Enhanced global marketing to attract customers, partners and influencers = Increased customer engagement a
Slide 16: Recent Design Wins Summary
RECENT DESIGN WINS SUMMARY = 1 Gigabit design win by existing US based Tier 1 customer expanding their mobile 4G/LTE product portfolio = 10 Gigabit design win at a new European based Tier 1 Telecom Equipment Manufacture customer for mobile security application = 10 Gigabit design win at new business
Slide 17: Market Trends and Outlook
napatech“™ / MARKET TRENDS AND OUTLOOK
Slide 18: Revised Management Guidance 2014
napatech“ REVISED MANAGEMENT GUIDANCE 2014 / = Napatech previously expected an improved business situation Guidance for full year 2014 is reduced to: in 2nd half of 2014 » Revenue around 2013 level - EBITDA margin around 10% = The business situation has improved in the 3rd quarter, but not a to the
Slide 19: Management Outlook
MANAGEMENT OUTLOOK BUSINESS PROGRESS y. = Development of our sales capabilities by engaging new direct channel partners in addition to our Dell OEM partnership = Expansion of general business opportunities by offensive go to a market and pricing strategies towards the lower-end of our markets = Our
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napatech
Slide 21: Important Notice
IMPORTANT NOTICE napatech“ This presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this presentation are based on current expectations, estimates and
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