ADVA Optical Networking Investor Presentation

Transcription

ADVA Optical Networking
Investor Presentation
July/August 2015
Disclaimer
FORWARD-LOOKING STATEMENTS
This presentation contains forward-looking statements with words such as “believes”, “anticipates” and
“expects” to describe expected revenues and earnings, anticipated demand for optical networking solutions,
internal estimates and liquidity. These forward-looking statements involve a number of unknown risks,
uncertainties and other factors that could cause actual results to differ materially. Unknown risks, uncertainties
and other factors are discussed in the ‘risk report’ section of ADVA Optical Networking’s annual report 2014.
CONSOLIDATED PRO FORMA FINANCIAL RESULTS
ADVA Optical Networking provides consolidated pro forma financial results in this presentation solely as
supplemental financial information to help investors and the financial community make meaningful comparisons
of ADVA Optical Networking’s operating results from one financial period to another. ADVA Optical Networking
believes that these pro forma consolidated financial results are helpful because they exclude non-cash charges
related to stock compensation programs and amortization and impairment of goodwill and acquisition-related
intangible assets, which are not reflective of the Group’s operating results for the period presented. This pro
forma information is not prepared in accordance with IFRS and should not be considered a substitute for
historical information presented in accordance with IFRS.
2
© 2015 ADVA Optical Networking. All rights reserved. Confidential.
ADVA Optical Networking Today
Key Facts
Mission
Our NUMBERS
>1400 employees
EUR 339m revenue
20 years of innovation
Our MISSION
is to be
the trusted partner
for innovative
connectivity solutions
that ADVANCE
next-generation
networks for cloud
and mobile services.
Our CUSTOMERS
Hundreds of carriers
Thousands of enterprises
Our QUALITY
TL 9000, ISO 14001
Award-winning
supply chain
We bring differentiation, quality and ease-of-use to next-generation networks
3
What We Do
Social
Community
Chat
Mobility
Cloud
Innovative
Connectivity
Phone
Partners
Search
Email
Scalable, programmable and secure optical networking solutions for the digital age
4
Capitalizing on Cloud and Mobility
Approx. $200 billion
Global annual infrastructure investment
$15 billion*
in optical transport
Social
Chat
Cloud &
Mobility
IP
Voice
Community
Next-Generation
Cloud Services
Partners
Email
Data
Video
Search
Phone
Interactive Multimedia
*2018 Market size; Industry analyst estimates for metro WDM equipment (“Optical”) and
Ethernet access devices (“Ethernet”) relevant for ADVA Optical Networking.
Sources: Infonetics Research Optical Network Hardware, Quarterly Market Share, Size, and Forecasts 4Q14, March 2015,
and Infonetics Research Ethernet Access Devices Biannual Market Share, Size and Forecasts, 1st Edition, March 2015.
Local Experience
Internet of Things
As an industry, we have built a great network – creative use has only started …
5
Business Segment Overview
Carrier Ethernet Access
Ethernet Wholesale
Business Ethernet
Mobile Backhaul
Addressable Market 2014*
EUR 8.3 billion
Industry analyst estimates for metro WDM
equipment (“Optical”) and Ethernet access devices
(“Ethernet”) relevant for ADVA Optical Networking.
Revenue Contribution 2014**
EUR 339.2 million
+9.2% vs. 2013
*
Segmental distribution of ADVA Optical
Networking revenues, rounded to full 5 per cent.
**
7%
25%
Carrier Infrastructure
Broadband Backhaul
Metro Networks
Long Haul
Private Enterprise Networks
79%
14%
35%
40%
Data Center Connectivity
Innovative connectivity solutions for service providers and enterprises
Sources: Infonetics Research Optical Network Hardware, Quarterly Market Share, Size, and Forecasts 2Q14, August 2014, and Infonetics Research Ethernet Access Devices Biannual Market Share, Size
and Forecasts, 2nd Edition, September 2014. The split of the WDM equipment into carrier infrastructure and enterprise solutions is based on ADVA Optical Networking internal estimates.
2014 addressable market translated into EUR at average 2014 FX rate of 1 EUR = 1.3290 USD.
*
6
Our Solutions Overview
Access
FSP Service Manager
Metro
Core
Ethernet Wholesale
Business Ethernet
Mobile Backhaul
FSP 150
FSP 3000
Broadband Backhaul
Metro Networks
Long Haul
Automated service delivery and assurance from access to core
7
FSP 3000 Overview
Main Applications
•
Metro transport and broadband backhaul
•
Enterprise SAN connectivity
•
Mega data center interconnection
•
Agile core networks
Key Features
FSP 3000
•
Application-optimized 100G solutions
•
Network hypervisor for SDN networking
•
Lowest footprint and power consumption
Scalable optical transport for all applications
8
FSP 150 Overview
Main Applications
•
Business Ethernet service delivery
•
Mobile backhaul solutions
•
Wholesale Ethernet access infrastructure
Key Features
FSP 150
•
Performance assured CE 2.0 service delivery
•
Service demarcation in NFV environments
•
Precise timing distribution and assurance
•
Secure and encrypted data transmission
Intelligent and assured Ethernet access and backhaul
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Oscilloquartz Synergies – It‘s About Time!
Precise Timing
Delivery and Assurance
FSP 150
FSP 3000
Intelligent Ethernet
Access and Aggregation
Scalable Optical Transport
OSA
ADVA
•
•
•
•
•
SyncE
PTP 1588
Mini-GM
Boundary Clock
…
•
•
•
SyncE
Sync OTN
...
We address all timing and synchronization areas of packet networks
10
Infrastructure Transformation
The optical networking renaissance has begun
Cloud & Mobility: the Age of Data Centers
Network Operators
Enterprises
Data centers are the new cornerstones of our networked societies
12
Enabling the Cloud I
Coupling Mega Data Centers
Data Center Interconnect
Low-Latency Networks
Data center
Backup center
High-speed connectivity to increase data center performance
13
Enabling the Cloud II
Load-Balancing Mega Data Centers
FSP Service Manager
Broadband Backhaul
Metro Networks
Long Haul
Open, programmable, optical network
Flexible Terabit/s infrastructure for better cloud efficiency
14
Enabling the Cloud III
Secure & Scalable Cloud Access
Ethernet Wholesale
Business Ethernet
Mobile Backhaul
Business Ethernet
Mobility
Carrier
Ethernet
Next-Generation Access
Secure cloud access solutions for fixed and mobile users
15
Where is the Networking Focus?
Profitable, mass-consumed, video
Virtual functions*
Popular web content
Advertising
*NFV (Network Function Virtualization) is going to host virtual functions proximate to the service edge in the metro
Enthusiasm for additional (networking) investment is in the metro
16
What Technologies Will Win?
5%
IT Elements*
55%
Non-Optical
Networking
17%
*Caching/Content Delivery Networks (CDN),
Instant Messaging Services (IMS), etc.
23%
60%
40%
Today
Optical
Networking
2020
Source: CIMI corp Jan 2015;
http://blog.cimicorp.com/?p=2036
Metro spend on optical networking will grow from 40% to 60% by 2020
17
Ongoing Focus on Innovation
Launch of the FSP 3000 CloudConnect™, with
the industry’s first 400Gbit/s single line card.
A fundamental shift in technology
representing a sweet spot
for the DCI market
Expansion of our ConnectGuard™ portfolio to provide
encrypted Ethernet connectivity, enabling secure
cloud access for both fixed and mobile users,
complementing our leadership position
of offering secure optical
data center interconnection
CLOUD
Innovation
Launch of the OSA 5411,
the first access network device
in the industry to offer Rubidium-based
timing and synchronization capabilities
along with a unique holdover algorithm
Launch of the
ADVA FSP 150-GE110Pro series,
built around openness, security and service
assurance – critical components for
NFV-optimized Network Interface Devices (NIDs)
Shaping the industry – Expanding our competitive advantage
18
The Industry Benchmark – Again
100Gbit/s
•
•
•
100G on a dual-slot line card
2.4Tbit/s per fiber
1Watt per 1Gbit/s
5.6Tbit/s
•
•
•
400G on a single slot line card
25.6 Tbit/s per fiber
0.5Watt per 1Gbit/s
Equipment Density – Scalability – Energy-Efficiency – Programmability
19
Competitive Overview
Mobile Backhaul
Business Ethernet
Ethernet Wholesale
Broadband Backhaul
Metro Networks
Long Haul
Key Competitors
Our ADVAntages
Timing excellence
Intelligent service definition and backhaul
Proven leadership in Ethernet Access Devices
Central and distributed NFV implementations
Best scalability with ease-of-use
Intelligent control plane and service manager
Multi-layer interworking with Juniper
First to market with innovation
(e.g. 16G FC, InfiniBand, 100G Metro)
Leader w integrated security options
ADVA Optical Networking is a thought leader in developing
intelligent connectivity solutions for high-growth markets
20
Customer-Optimized Sales Model
Solutions integration
NMS integration
Long relationships
OEM
DIRECT
e.g.
VAR
CUSTOMER
Regional focus
Vertical segments
Long relationships
Three-pronged distribution model to flexibly address customer needs
21
Our Broad Customer Base
Service Providers
Enterprises
Internet & Cloud
Government & Education
Global success with innovative connectivity solutions
22
Our Global Presence
Munich
Meiningen
Gdynia
York
Shenzhen
Atlanta
Singapore
Headquarter
Neuchâtel
Office
Representative
Application and technology expertise close to our customers
23
Financial Performance
24
Annual IFRS Revenues and Pro Forma Profitability
Revenues and Pro Forma Gross Profit*
+25%
291.7
+7%
310.9
37.7%
38.4%
2010
2011
+6%
330.1
-6%
310.7
+9%
339.2
40.4%
39.3%
35.0%
2012
2013
2014
8.6
9.5
Pro Forma Operating Income**
13.3
+118%
17.3
+30%
21.8
+26%
4.6%
5.6%
6.6%
-61%
2.8%
2010
2011
2012
2013
(in millions of EUR, in % of revenues)
Growth Y-o-Y
* From 2012, amortization for capitalized development projects is presented as cost of goods sold. Prior period information has been adjusted accordingly.
** Pro forma operating income is calculated prior to non-cash charges related to the stock option programs and amortization
and impairment of goodwill and acquisition-related intangible assets.
25
+10%
2.8%
2014
Quarterly IFRS Revenues and Pro Forma Profitability
Revenues and Pro Forma Gross Profit
+11%
+10%
+14%
87.2
87.1
86.7
28.6
30.8
31.8
32.8%
Q2 2014
+22%
95.6
34.6
+29%
112.3
38.7
35.3%
36.6%
36.2%
34.4%
Q3 2014
Q4 2014
Q1 2015
Q2 2015
7.7
Pro Forma Operating Income*
5.1
3.7
3.5
0.4
0.5%
Q2 2014
4.0%
5.9%
3.9%
Q3 2014
Q4 2014
Q1 2015
Growth Y-o-Y
* Pro forma operating income is calculated prior to non-cash charges related to the stock option programs and amortization
and impairment of goodwill and acquisition-related intangible assets.
26
6.8%
Q2 2015
IFRS Profitability
2014
EUR Million
Q2
Pro Forma Operating Income
0.4
(0.5%)
Operating Income
0.0
(0.0%)
Net Income
0.0
Diluted EPS in EUR*
Q3
3.5
(4.0%)
3.1
(3.5%)
4.4
2015
Q4
5.1
(5.9%)
5.1
(5.9%)
4.3
Q1
Q2
3.7
7.7
(3.9%)
(6.8%)
3.3
7.4
(3.5%)
(6.6%)
4.3
5.1
(0.0%)
(5.1%)
(5.0%)
(4.5%)
(4.6%)
0.00
0.09
0.09
0.09
0.11
Margins, in % of Revenues
9
7
6.8%
6.6%
5
4.6%
3
1
-1
27
Q2 2014
Q3 2014
Q4 2014
Q1 2015
Q2 2015
Quarterly Revenues Per Region
112.3
95.6
87.2
87.1
86.7
11%
9%
6%
34%
33%
31%
5%
58%
63%
58%
Q2 2014
Q3 2014
Q4 2014
Q1 2015
Americas
Asia-Pacific
Growth Y-o-Y
Note: Potential differences due to rounding
28
30%
-29%
+14%
37%
55%
EMEA
6%
64%
Q2 2015
+49%
IFRS Balance Sheet
Dec. 31
2014
Jun. 30
2015
Equity & liabilities
Dec. 31
2014
Jun. 30
2015
Cash & cash equivalents
83.9
78.8
Accounts payable
33.0
52.2
Accounts receivable
54.0
73.3
Financial liabilities
35.0
31.3
Inventories
47.0
65.9
Other liabilities
79.7
85.6
Other assets
139.9
146.6
Equity
177.1
195.5
Total
324.8
364.6
Total
324.8
364.6
Assets
Days Sales Outstanding (DSOs)
Working Capital
Days Payable Outstanding (DPOs)
100
Inventory Turns
80
6.0
70
5.6
80
60
40
62
60
20
0
50
-20
-40
4.7
40
Q2
2014
Q2
2015
Q2
2014
Healthy working capital metrics DPOs > DSOs
(in millions of EUR)
29
5.2
60
4.8
4.4
Q2
2015
Cash and Net Liquidity
90
75
78.8
Cash & Cash Equivalents
60
45
47.5
Net Liquidity
30
15
0
Q2
2012
Q2
2015
(in millions of EUR)
High quarter-end cash and net liquidity positions at the end of Q2 2015,
demonstrating financial strength and operational flexibility
30
IFRS Consolidated Cash Flow Statement
EUR million
Q1 2015
Q2 2015
Net cash provided by operating activities
-1.5
18.1
Net cash used for investing activities
-9.0
-11.5
Net cash provided by (used for) financing activities
-2.4
-1.0
Net effect of foreign currency translation
2.4
-0.1
Net change in cash and cash equivalents
-10.5
5.4
at beginning of period
83.9
73.4
at end of period
73.4
78.8
-3.1
15.1
Cash and cash equivalents
Free cash flow*
* Free cash flow = Net cash provided by operating activities
./. capital expenditures for property, plant and equipment, finance leases and intangible assets not related to development activities.
Note: Potential differences due to rounding
31
Guidance Q3 2015
•
Revenues between EUR 120 million and EUR 125 million
•
Pro forma operating margin between 5% and 8% of revenues*
•
ADVA Optical Networking will continue to perform detailed quarterly
reviews of the expected business development in respect of all intangible
assets, including capitalized research and development expenses; in case
of highly adverse business prospects, these reviews may result in noncash impairment charges
*
32
Excluding any potential impairment charges.
Investor Relations Overview (I/II)
Recent Investor Activities
Planned Investor Activities
Apr-Jun
 Investor roadshows and conferences in Europe
and America: Frankfurt, Berlin, London, Helsinki,
and Miami
Jul-Sep
 Investor roadshows and conferences in Europe
and America: Frankfurt, London, Munich, Zurich,
Vienna, Las Vegas, Helsinki, Copenhagen, and
Oslo
May 20
 Annual General Meeting
Aug 19
 Analyst & Investor Day, Meiningen, Germany
Jul 23
 Release of Q2 2015 IFRS financials and
guidance for Q3 2015
 Updates to financial analysts
Oct 22
 Release of Q3 2015 IFRS financials and
guidance for Q4 2015
 Updates to financial analysts
Stockholder Structure
Financial Analyst Coverage
As of June 30, 2015: 48,526,711 shares outstanding
17.8%
82.2%
Free float
EGORA Group
Source: Aggregate as of Jul 20, 2015.
33









ADVA Management
DNB Asset (NO)
Deutsche Asset (DE)
Norges (NO)
Acadian Asset (US)
Dimensional (US)
Fidelity (US)
Skandia Fonder (SE)
LBBW (DE)






Janus Capital (UK)
Swisscanto (CH)
BlackRock (DE)
UBS (DE)
Other inst. inv.
Retail inv.
1.5%
8.6%
7.8%
3.9%
3.4%
3.0%
2.9%
2.1%
1.0%
As of Jul 17, 2015
Institution
Recommendation/
target price
Last
update
Last
change
Oddo Seydler Bank
Deutsche Bank
Buy (€10.00)
Hold (€7.30)
Jul 13, 15
Jun 16, 15
 (€8.00)
Hauck & Aufhäuser
Hold (€9.20)
Jul 15, 15
 (€9.20)
LBBW
Hold (€6.70)
Jun 16, 15
 (€5.25)
Ø
48.0%
below
1.0% each
€ 8.43
 (€3.80)
Investor Relations Overview (II/II)
Financial Analyst IFRS Estimates
Share Price and Trading Volume Development
Trading volume
in thousand
Jul 1, 2014 – Jul 15, 2015
FWB Xetra data
Share price
in €
As of Jul 20, 2015
(x%) = % of revenues
Excludes outdated estimates
FY 2014
34
Ø daily trading volume
(in shares)
Share price in EUR
 1 month:
 6 months:
 12 months:
 Current (Jul 15)
 52 week high
 52 week low
597,234
282,229
184,345
9.41
9.52
2.46
Q2 2015
ADVA
guidance
FY 2015
Ø analyst Ø analyst
estimate estimate
FY 2016
Ø analyst
estimate
EUR m
Actual
Revenues
339.2
(9.2%)
110.7
(15.8%)
426.0
(25.6%)
482.4
(13.2%)
Pro forma
op. inc.
7.3
9.5
6.5 – 8.5
(2.8%) (6.0% – 7.5%) (6.6%)
25.9
(6.1%)
28.9
(6.0%)
Net
income
8.4
(2.5%)
20.1
(4.7%)
24.0
(5.0%)
109 - 113
5.6
(5.1%)
In Summary, How We ADd VAlue
Profitable
growth
Focus on
growth
markets
Expanding
opportunities
Thought
leadership
Differentiated
technology
Operational
excellence
Loyal
customers
ADVA Optical Networking is a thought leader in developing
innovative connectivity solutions for cloud and mobile services
35
Thank You
Karin Tovar
Director
Investor Relations
t +1 201 940 7212
f +49 89 89 06 65 22 892
[email protected]
www.advaoptical.com
IMPORTANT NOTICE
The content of this presentation is strictly confidential. ADVA Optical Networking is the exclusive owner or licensee of the content, material, and information in this
presentation. Any reproduction, publication or reprint, in whole or in part, is strictly prohibited.
The information in this presentation may not be accurate, complete or up to date, and is provided without warranties or representations of any kind, either express or
implied. ADVA Optical Networking shall not be responsible for and disclaims any liability for any loss or damages, including without limitation, direct, indirect, incidental,
consequential and special damages,
alleged to have been caused by or in connection with using and/or relying on the information contained in this presentation.
Copyright © for the entire content of this presentation: ADVA Optical Networking.

ADVA Optical Networking Investor Presentation

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