Slide 1: Q2 2014 Presentation
napatech Q2 2014 PRESENTATION AUGUST 2014 HENRIK BRILL JENSEN, CEO
Slide 2: Financial Highlights Q2 2014
napatech“ FINANCIAL HIGHLIGHTS Q2 2014 Invoiced USD sales decreased by 17% compared to Q2 2013 The combined Q1 and Q2 2014 USD revenue in line with our initial expectations Revenue in first half of 2014 of 89.6 MDKK = 7% decrease compared to first half of 2013 Revenue in Q2 2014 at 41.8 MDKK = 19% d
Slide 3: Financial Results Q2 2014
FINANCIAL RESULTS Q2 2014 napatech“ Revenue (MDKk) Growth YoY Gross Margin EBITDA (MDKk) EBT (MDKk) Q214 41.8 (19%) 73% 1.8 (3.7) Q1’14 Q213 47.8 51.7 8% 14% 73% 73% 6.5 9.1 0.9 5.5 Napatech A/S Copyright 2014
Slide 4: Cash Flow Q2 2014
napatech“ CASH FLOW Q2 2014 1,000 DKK Q2’14 Q213 Net cash flow from operating activities 3,021 4,786 Investments in product development (9,593) (6,063) Net cash used in investments activities (11,802) (7,822) Issue of shares ie) 135 Net cash flow from financing 0 135 Net decrease in cash & cash equi
Slide 5: Q2 2014 Decline in Revenue
napatech Q2 2014 DECLINE IN REVENUE Invoiced Sales / Revenue Growth Influencing factors: » Overall market situation is still challenging with obvious quarterly fluctuations in received orders from our customers Revenue affected by a combination -5,0% of push out of customer projects and some project
Slide 6: Gross Margin - Continued Improvements
napatech GROSS MARGIN — CONTINUED IMPROVEMENTS Gross Margin Margin development » Transition towards higher speed 80% products » Operational excellence and improvements » Change in customer mix » The longer term gross margin FS expectation are around 70% 75% 2011 2012 2013 H1'14 Napatech A/S Copyrigh
Slide 7: Q2 Revenue Development Put EBITDA Margin Under Pressure
Q2 REVENUE DEVELOPMENT PUT napatech EBITDA MARGIN UNDER PRESSURE EBITDA Margin 30% 25% 20% Q2 2014 EBITDA margin » Lower revenue add pressure on EBITDA » Gross margin effect have positive impact » Increased R&D costs - investing according to plan Lill Q2'13 Q3'13 Q413 Q1'14 Q2'14 Napatech A/S Copyri
Slide 8: Regions Affected by Different Factors Compared to Q2 2013
REGIONS AFFECTED BY DIFFERENT FACTORS COMPARED TO Q2 2013 Q2’14 Revenue Growth Geographical split = North America on recovery trend 0% | but are still seeing some delays. And -10% itis important to notice that NAM -20% revenue is 80% of the total revenue -30% EMEA affected by a combination of -40% p
Slide 9: Recent Events and Shareholder Status
napatech RECENT EVENTS AND SHAREHOLDER STATUS
Slide 10: Recent Recognitions and Events
RECENT RECOGNITIONS AND EVENTS = Demonstrated 100 Gigabit connectivity at Interop Tokyo together with Spirent - a world leader in traffic generation = Napatech and ipoque* very successfully demonstrated 40 Gigabit High- Speed VoLTE and Video Analytics solution at Cisco Live = Network Products Guide,
Slide 11: The QSI - Historical Perspective
napatech“ THE QS! — HISTORICAL PERSPECTIVE Sequential port growth ~ Measured as sequential growth in port shipment quarter over quarter » High-end port (10 GbE and above) e 40% : a 30% changes have more impact on revenue 20% » The correlation between revenue 10% in DKK and the QSI is affected by 0%
Slide 12: Top Shareholders July, 2014
napatech™ TOP 20 SHAREHOLDERS 31 JULY, 2014 Shareholders 1 - 10 Shareholders 11 - 20 z Investor Type Country (%) Investor Type Country (%) Verdane Capital VIII Ordinary Denmark 22.2 Treschow-Fritzoe AS Ordinary Norway 2.0 Northzone IV K/S Ordinary Denmark 22.0 Northzea Management Ordinary US 1.5 Ska
Slide 13: Strategic Direction and Focus
Slide 14: Our Strategy and Focus Areas
napatech“ OUR STRATEGY AND FOCUS AREAS SUPPORTING OUR GROWTH AMBITIONS DIS! ol | im Telecom Financial Cloud and E-commerce _Infrastructure Operators Services Data Center and Media and Defense Services Enterprise Security T T oe Enterprise Management ~at i > Napatech A/S Copyright 2014
Slide 15: Recent Design Wins Summary
RECENT DESIGN WINS SUMMARY = New 1 Gigabit design win at a leading US Telecom equipment provider for their next generation public safety solutions = Obtained our second 10 Gigabit design win with South Korean based Telecom equipment manufacturer for LTE network monitoring = Secured major 40 Gigabit
Slide 16: Napatech Accelerate Security Performance
napatech“ NAPATECH ACCELERATE SECURITY PERFORMANCE » We have chosen to focus part of our strategy on the enterprise Lancope StealthWatch FS 3000 FS 4000 security market and the successful acceleration of the Lancope Ma provemeny ox Throughput (512 byte) 5.0Gbps 20.0 Gbps application is one important
Slide 17: Napatech Expands in Mobile Telecom
napatech“ NAPATECH EXPANDS IN MOBILE TELECOM = Our recent pipeline of design wins, shows an strong traction in the Telecom sector especially focused towards mobile solutions » This underlines the progress of our strategy where one of the elements are to deliver solutions that addresses the pain poin
Slide 18: Market Trends and Outlook
napatech“™ / MARKET TRENDS AND OUTLOOK
Slide 19: Growing Opportunities in Telecom
napatech“ GROWING OPPORTUNITIES IN TELECOM b = Carriers are rolling out Ethernet in backbone as technology of choice, m= replacing proprietary technology « LTE rollout accelerates the adoption of Ethernet and IP in mobile networks = 100G Ethernet links are starting to be deployed in the mobile backb
Slide 20: Mobile Telecom Industry Trends
napatech“ MOBILE TELECOM INDUSTRY TRENDS Mobile data traffic Exabytes per month ~ x ivy More than 500 LTE ‘networks by 2017 across 128 countries covering more See ote than half of the world’s population CAGR 2010-2013 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Cisco; VNI Feb 2014 and VNI M
Slide 21: 1H 2014 Progress, Achievements and Improvement Areas
1H 2014 PROGRESS, ACHIEVEMENTS AND IMPROVEMENT AREAS y. » We released the new Napatech positioning strategy to clearly articulate what our customers can expect from Napatech. This has helped us to create internal focus on defined industries and customers with solid growth potential a = Our release o
Slide 22: 1H 2014 Progress, Achievements and Improvement Areas
1H 2014 PROGRESS, ACHIEVEMENTS » AND IMPROVEMENT AREAS / = Our growth performance is not yet satisfactory » We are therefore intensifying our focus on securing global growth by accelerating activities in sales and marketing by enhancing our local a geographical presence, sales and marketing resource
Slide 23: Management Outlook
MANAGEMENT OUTLOOK y. = First half of 2014 in line with Napatech initial expectations i » We still expect the general climate for network infrastructure investments to improve during second half of 2014 = We are accelerating expansion of our Sales and Marketing activities which are expected to fuel
Slide 24: napatech
napatech
Slide 25: 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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