Ceragon Networks Ltd. · NASDAQ:CRNT
Ceragon Networks — Investor Presentation (May 2017)
26 slides from Ceragon Networks's investor presentation, May 2017
Slide 1: The #1 Wireless Backhaul Specialist
The #1 Wireless Backhaul Specialist Investor Presentation Proprietary and Confidential May 2017
Slide 2: Safe Harbor
Safe Harbor This presentation 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: The #1 Wireless Backhaul Specialist
The #1 Wireless Backhaul Specialist Wireless Backhaul Small Cells Macro-cells Macro-cells and Hubs Backbone 100Mbps – 2Gbps 500Mbps – 2.5Gbps > 5Gbps Wireless Backhaul Most advanced technology Global reach Focus on high-value deals Leveraging vertical integration >900,000 radios installed in Project
Slide 4: Serving Global Markets
Serving Global Markets With diverse wireless backhaul solutions Public Safety Oil & Gas Mobile Wireless ISP’s Utilities Proprietary and Confidential 4
Slide 5: Investment Highlights
Investment Highlights Leader in premium segment of the market Time-to-market advantage with technologically-advanced IP-20 platform Competitive strengths provide ability to be selective, obtain major share of highest-value opportunities Financial stability enables continuous innovation and design-to
Slide 6: Our Approach to Wireless Backhaul Market: Selective
Our Approach to Wireless Backhaul Market: Selective Sustainable profitability requires vetting every deal in a fragmented, competitive market Avoid Bundled/Price Focused Deals Seek Best-of-Breed Focused Deals • End-to-end network bundling; no specific vendor • Service providers seek the best wireles
Slide 7: Executing on a 3-Pillar Strategy
Executing on a 3-Pillar Strategy To offer differentiated solutions for select high value opportunities Continue to Leverage Our Focus Invest in Strong Position in All On Highest Value Best Technology Geographies Opportunities and Solutions Proprietary and Confidential 7
Slide 8: We Innovate Rapidly Through Vertical Integration
We Innovate Rapidly Through Vertical Integration Ongoing investment in superior technology Advanced Frequency Advanced Space SDN for Wireless Reuse Diversity Backhaul 4x4 LoS MIMO New spectrum Easy Set (90-140GHz), 20Gbps Radios 4th Generation Unique multicore technology FIBEAIR IP-20 PLATFORM Propr
Slide 9: FIBEAIR IP-20 PLATFORM
RESOLVE BACKHAUL CHALLENGES More capacity | More services | More customers LESS RESOURCES Spectrum | Real-estate | Power | Labor FIBEAIR IP-20 PLATFORM MULTICORE EVERYWHERE - IN ALL DEPLOYMENT SCENARIOS Proprietary and Confidential 9
Slide 10: Leverage our Strong Position in All Geographies
Leverage our Strong Position in All Geographies Latin America, 24% India , 31% Asia Pacific, 12% Africa, 6% • Demand for best-of-breed solutions is worldwide Europe, 13% North America, 14% • Investment cycles shift between regions • Operator consolidation and network sharing causes shifts TTM Revenu
Slide 11: Enabling Key Worldwide 4G Expansions
Enabling Key Worldwide 4G Expansions With the industry-leading wireless backhaul platform – FibeAir IP-20 USA, Mexico, India Proprietary and Confidential 11
Slide 12: Global Reach – Local Presence
Global Reach – Local Presence Over 33% 900,000 of sales Radios installed in with global over 130 countries Tier 1 operators Proprietary and Confidential 12
Slide 13: We help Tier 1 operator in Mexico
We help Tier 1 operator in Mexico make mobile internet available to 100M people Merge two small operators, rapidly grow customer base Nationwide 4G rollout | Dense urban coverage within 12 months FAST COVERAGE Modernize network | Avoid resource bottlenecks NATIONWIDE One backhaul platform – FibeAir
Slide 14: We help Tier 1 U.S. operator gain more customers
We help Tier 1 U.S. operator gain more customers Achieve best customer experience NETWORK DENSIFICATION Large scale network densification and optimization & OPTIMIZATION STRATEGY 1.3Gbps wireless-fiber | Future-proof | Lightweight (monopole fit) Compact | Reliable | Simple & quick to install Massive
Slide 15: We help Tier 1 U.S. operator implement its strategy
We help Tier 1 U.S. operator implement its strategy Expand coverage & capacity MORE TO EACH without service interruption CUSTOMER = MORE Upgrade 3G backhaul radios to 4G performance CUSTOMERS Multi Gbps 4G+ wireless backhaul | Maintain install base | No interruption upgrade Network densification for
Slide 16: We help Operator in India become one of the largest 4G providers
We help Operator in India become one of the largest 4G providers Nationwide 4G coverage Ultra high capacity to every site REACH 250M CUSTOMERS In 2017 Lightweight (pole-fit) radios; 500Mbps – 1Gbps 100% capacity instant-upgrade | Ceragon installs 125,000 radios 5G-ready | Network densification | x40
Slide 17: We help Tier 1 operator in India maintain its #1 position
We help Tier 1 operator in India maintain its #1 wireless provider position IMPROVE Quick 3G to 4G upgrade | Coverage & capacity expansion NETWORK Simple all-IP modernization QUALITY & SUBSCRIBER EXPERIENCE Upgrade 3G backhaul radios to 4G performance Modular 4G high capacity nodes; Network expansio
Slide 18: We help European operator deliver the best user experience
We help European operator deliver the best user experience Network expansion & densification for 4.5G mobile video services IMPROVE Bundle mobile and wireless-DSL services| Significantly reduce OPEX NETWORK & SERVICE QUALITY Upgrade 3G backhaul radios to 4.5G performance Increase wireless backhaul c
Slide 19: Focus on Highest Value Opportunities
Focus on Highest Value Opportunities • Use competitive strengths to win a large share of most profitable opportunities • Expanding footprint in profitable vertical markets • Well-positioned to gain share as industry shake-out continues Mobile Public Safety Oil & Gas Proprietary and Confidential 19
Slide 20: Profit Improvement Initiatives Succeeding
Profit Improvement Initiatives Succeeding • Strategy improves gross profit but tempers revenue • Deeper analysis of each opportunity • New compensation scheme to better motivate sales force • Consider impact of deal terms on working capital requirements • More stringent criteria for extending paymen
Slide 21: P&L – Managing for Profitability (Non-GAAP)
P&L – Managing for Profitability (Non - GAAP) Q2:17 (US$M) Q1:16 Q2:16 Q3:16 Q4:16 Q1:17 Target for FY17 Guidance Revenues $59.8 $70.0 $79.1 $84.7 $76.0 Higher Higher than 2016 Gross profit 21.7 24.9 26.8 27.9 22.8 Gross margin 36.3% 35.5% 33.8% 32.9% 30.0% Slightly higher >32% Operating ~Flat at $2
Slide 22: Strong Balance Sheet
Strong Balance Sheet Continued to reduce debt in Q1 (U.S. dollars in millions) (Unaudited) a/o March 31, 2017 Substantial unused borrowing capacity under revolving credit facility Cash & cash equivalents 36.5 Bank debt 11.5 Inventory 50.8 Expect positive cash flow in 2017 AR 99.5 DSOs 117 Proprietar
Slide 23: Formulating a Strategy to Accelerate Long-term Growth
Formulating a Strategy to Accelerate Long-term Growth Continuing to refine focus on both offensive and defensive strategies Technology Fit/Business Risk Analysis Value Creation/Financial Risk Analysis New small • Relevance to core competencies cell 5G fixed wireless • Time to revenue backhaul • Pote
Slide 24: Profitability Enables Ongoing Investment to Enhance Our Leadership During Evolution to 5G
Profitability Enables Ongoing Investment to Enhance Our Leadership During Evolution to 5G 2020 2018 Today 20 Gbps 10 2.5 Gbps Gbps • E-Band • V-Band • 6 – 42GHz: Higher orders of LoS MIMO technology • W-Band (100GHz) • 6 – 42GHz: LoS 4x4 MIMO • E-Band • D-Band (140GHz) • E-Band • V-Band • V-Band 1H’
Slide 25: Investment Highlights
Investment Highlights Leader in premium segment of the market Time-to-market advantage with technologically-advanced IP-20 platform Competitive strengths provide ability to be selective, obtain major share of highest-value opportunities Financial stability enables continuous innovation and design-to
Slide 26: Thank You
Thank You Proprietary and Confidential