Slide 1: DNB TMT Presentation
DNB TMT Presentation Ray Smets CEO 2 September 2020 NAPATECH A/S © COPYRIGHT 2020
Slide 2: Danish Tech Company Founded in 2003, Listed in 2013
Danish Tech Company Founded in 2003, Listed in 2013 • +17 year history delivering high-performance Network Interface Cards (SmartNICs) to customers globally • Unparalleled expertise accelerating compute-intensive applications on standard open servers • High-tech solution with 22 patents & patents-pe
Slide 3: Unique Expertise Focused on Application Acceleration
Unique Expertise Focused on Application Acceleration • Napatech designs high-performance SmartNICs with software to offload servers and accelerate CPU-hungry applications • R&D located in Denmark and Sales organization located in USA, DK and Asia; 85 employee total • Production handled by a US-based
Slide 4: Selling to Top Tier Global Customers
Selling to Top Tier Global Customers • Napatech customers are primarily global top-tier companies • Majority of revenue comes from global OEMs with long-term strategic relationships and sales committed through multi-year design win cycles • Direct end-user sales to large corporations with own data c
Slide 5: The Problem: Server CPU's Cannot Keep Up
The Problem: Server CPU’s Cannot Keep Up Major industry players have focused their strategies on FPGA technology Application speed & processing Major FPGA chip vendors Major cloud companies requirements FPGA Acceleration Major server vendors Major telco vendors Standard compute platform performance
Slide 6: The Solution: Napatech's SmartNICs are Used to Accelerate Applications
The Solution: Napatech's SmartNICs are Used to Accelerate Applications • Using Napatech's SmartNICs customers can: • achieve significantly faster application performance on business-critical applications • obtain significant capacity improvements from increased data throughput • free up expensive se
Slide 7: Napatech is addressing a rapidly growing market
Napatech is addressing a rapidly growing market • Growth in SmartNIC market is fueled by • growth in servers for data centers, corporate networks and 5G infrastructure • accelerating network speeds, and • increased security workloads NAPATECH A/S © COPYRIGHT 2020 7
Slide 8: SmartNICs: Total NIC Market Segmentation
TOTAL NIC Market Segmentation Market Share (%) FY 2019 1 Basic NIC 1. Intel 24.3% • Ultra-low cost, low-margin 2. Mellanox (NVIDIA) 20.5% • Fixed function • Not programmable (ASIC-based) 3. Broadcom 14.3% 4. Microsoft 10.3% 2 Offload NIC • Slightly more expensive 5. Amazon 7.4% • Focused on offload
Slide 9: Programmable NIC Market Overview
Programmable NIC Market Overview 1Q20 FY19 All Others 10.4% Solarflare (Xilinx) 2.1% Silicom (Self-Build) (Vendors) 3.3% Mellanox (NVIDIA) • Napatech ranks #3 amongst 3.4% major vendors in Napatech 7.2% Programmable NIC market* Microsoft 50.5% • Napatech is #1 vendor with Broadcom FPGA solutions 7.4
Slide 10: Napatech is Emerging in a Large Growing Market
Napatech is Emerging in a Large Growing Market Leading market analysts estimate the NIC market will grown from $1.7B in 2019 to $4.4B in 2024 • Programmable NIC is the fastest growing part of the NIC market • Napatech targets the highest growth segment of the overall NIC market NAPATECH A/S © COPYRI
Slide 11: 1H 2020 Financials
1H 2020 Financials NAPATECH A/S © COPYRIGHT 2020 13 August 2020 11
Slide 12: Strong Performance in 1H 2020
Strong Performance in 1H 2020 Growing Profitable 1H 2020 YoY Revenue Growth +25% Solid Gross Margins of 72% Free Cash Flow for 1H was Best Ever EBITDAC Positive and Growing Earnings is Positive for the FIRST TIME NAPATECH A/S © COPYRIGHT 2020 13 August 2020 12
Slide 13: Trends: Growing and Profitable
Trends: Growing and Profitable Revenue over the last 3 1H periods Free Cash Flow over the last 3 1H periods demonstrate the underlying strength and demonstrates improved operating leverage stability of Napatech’s business and lowers risk Revenue DKKm Free Cash Flow DKKm 12.2 97.4 4.7 77.9 2018-H1 20
Slide 14: Positive 1H EBITDAC and Earnings for the First Time
Positive 1H EBITDAC and Earnings for the First Time 1H positive earnings show solid progress towards leverage and longer-term profitable operation EBITDAC DKKm Earnings DKKm 9.5 2,5 2018-H1 2019-H1 2020-H1 2018-H1 2019-H1 2020-H1 (6.3) (15,7) (52.4) (42,8) NAPATECH A/S © COPYRIGHT 2020 13 August 202
Slide 15: 2020 Outlook
2020 Outlook NAPATECH A/S © COPYRIGHT 2020 13 August 2020 15
Slide 16: Updated Guidance for 2020
Updated Guidance for 2020 Note: Annual guidance for 2020 guidance is updated as follows: • Due to the exchange rate development guided Revenue range in USD is up from Guidance Previous Updated $27.7-30.7M to $28.3-31.4M • With performance in the middle of the Revenue DKK 185-205m DKK 185-205m guided
Slide 17: Why Invest In Napatech?
Why Invest In Napatech? STABLE REVENUE, EXCITING DELIVERING WINNING & CASH FLOW MARKET PRODUCT TOP GROWING & POTENTIAL INNOVATION CUSTOMER EARNINGS BRANDS NAPATECH A/S © COPYRIGHT 2020 17
Slide 18: Stay Connected With Napatech
Stay Connected With Napatech On The Web: Social Media: Other News: www.google.com/alerts www.google.com/alerts www.napatech.com/investor-relations www.napatech.com/newsletter NAPATECH A/S © COPYRIGHT 2020 13 August 2020 18