Transcript ADVA AG Optical Networking Annual Press & Analyst Conference

ADVA AG Optical Networking
2000 Annual Shareholders’ Meeting
Brian L. Protiva, Chief Strategy Officer
Andreas G. Rutsch, Chief Financial Officer
May 24, 2000
Munich, Germany
Highlights
• Leading global provider of optical networking
solutions
• Pioneer in the DWDM market
• Dynamic growth and acquisition strategy
• Clearly differentiated from competitors
• technology/products
• distribution
• management
2
Optical networking market
• Challenge
• exploding amounts of
data traffic
• fiber exhaustion and
insufficient transmission
capacity
• new
telecommunications
networks
• customer requirement
for wavelength
management/scalable
network architectures
• Solution
• Dense Wavelength
Division Multiplexing
(DWDM) and intelligent
optical networking
solutions
• “Virtual Fiber” to
maximize bandwidth of
installed fiber
3
Optical networking market
Long Haul
Backbone
(WAN)
O-BLSR 2/4 Fiber Ring
Metro
Metro ring
Central Office
O-BLSR 2/4 Fiber Ring
OADM
Access ring
CPE
2000 Market Size:
$200 Million USD
Market Growth:
100-300% CAGR 2000-2003
Metro Access
OADM
OADM
O-UPSR
(MAN)
OADM
OADM
CPE
Central Office
2000 Market Size:
$3.5 Billion USD
Market Growth:
21% CAGR 2000-2003
OADM
Access ring
O-UPSR
CPE
Enterprise
(SAN/LAN)
2000 Market Size:
$150 Million USD
Market Growth:
100-300% CAGR 2000-2003
Note: market size and growth estimates based on 1999 and 2000 studies by Pioneer Consulting, RHK and Ovum
4
Optical networking market
• Driving factors
•
•
•
•
disaster recovery
mergers and cooperation of companies
data center services
distributed offices and outsourced IT
• Convergence of enterprise and carrier networks
• delivery of traditional enterprise services by carriers
• significant revenue opportunities for carriers and
equipment providers
5
Product portfolio
Metro ring
Access ring
Carrier Networks
Access ring
Carrier Networks (CO)
Enterprise Networks
Enterprise Networks (CPE)
• FSP-I
• FSP-II
• FSP 3000
• DiskLink
• Cellware product family
6
Product strategy
Networking Software
Element Management System
seamless network management
Metro Access
Core
Optical IAD
Optical CrossConnect
complementary technologies - independent platforms
SAN
Video
7
Distribution Strategy
• Blue chip OEM partners and strategic
distributors
• OEMs: Cisco, Alcatel
• VARs: Inrange, StorageTek, Controlware
• End-user customers
• more than 200 enterprises
• 14 telecommunication carriers
• Carrier competence center (C3) team
• focuses expertise of ADVA’s sales &
product marketing teams
• drives product strategy
End-User Customers
250
200
150
100
50
0
1997
Europe
1998
Americas
1999
Asia-Pacific
• Strong global presence
• 7 sales offices worldwide
8
Strategy
• Superior organic growth
• first-to-market with cost-efficient solutions
• introduction of FSP 3000
• expansion of blue-chip VAR & OEM channels
• Cisco OEM agreement
• winning of 3-year Bell Atlantic contract
• increasing global presence
• opening of Tokyo office
9
Strategy
• Aggressive acquisition-oriented growth
• Storage Area Networks Ltd. (UK)
• storage area network router solutions
• purchase price: $83 million USD
• Cellware GmbH (Berlin)
• integrated access devices, video
solutions
• purchase price: 23.4 million Euro
• strategic investment in OptXCon Inc.
• optical cross connects
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Q1 2000 financial highlights
Q1 2000 Q1 1999 % growth
Sales
Operating income (EBIT)
Profit before tax (EBT)
Net profit
Diluted earnings per share (EPS)
Number of employees
Total assets
Total shareholders' equity
10,297
554
635
362
0.07
151
43,662
33,769
3,628
-20
-38
-38
-0.01
83
35,478
30,364
183.8%
81.9%
23.1%
11.9%
*thousands of Euro, except earnings per share and number of employees
*unaudited, according to U.S. GAAP
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Q1 2000 financial highlights
Sales
(thousands of Euro, U.S. GAAP)
Operating income
Net profit
(thousands of Euro, U.S. GAAP)
(thousands of Euro, U.S. GAAP)
10297
554
362
3628
-20
Q1 1999
Q1 2000
Q1 1999
-38
Q1 2000
Q1 1999
Q1 2000
12
1999 financial highlights
Sales
Operating income (EBIT)
Profit before tax (EBT)
Net profit
Diluted earnings per share (EPS)
Number of employees
Total assets
Total shareholders' equity
1999
1998 % growth
23,558
1,925
2,184
2,165
0.42
132
40,351
33,412
11,441
639
596
521
0.10
75
5,435
725
105.9%
201.3%
266.4%
315.5%
320.0%
76.0%
642.4%
4509%
*thousands of Euro, except earnings per share and number of employees
*fully audited according to U.S. GAAP
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Sales per product
1998 Sales
11.4 Million Euro
Others
30%
1999 Sales
23.6 Million Euro
Others
2%
OC M 4
11%
OC M 4
16%
FSP-II
30%
OC M 8
26%
OC M 16
2%
OC M 8
57%
FSP-I
14%
OC M 16
12%
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Sales per geographic region
1998 Sales
11.4 Million Euro
1999 Sales
23.6 Million Euro
AsiaPacific
7%
AsiaPacific
8%
America
25%
America
31%
Europe
67%
Europe
62%
15
1999 financial highlights
Operating income
(thousands of Euro, U.S. GAAP)
Net profit
(thousands of Euro, U.S. GAAP)
1998
521
1999
(Euro, U.S. GAAP)
2165
1925
639
Earnings per share (EPS)
1998
0.42
0.10
1999
1998
1999
16
Human resources
ADVA employees worldwide
December 31, 1998 - total 75
Management,
administration,
finance, IT
13
Apprentices
4
R&D
17
Sales, service,
marketing, product
marketing
11
Quality
management 3
27
Procurement
and production
ADVA employees worldwide
December 31, 1999 - total 132
Management,
administration,
finance, IT
Sales, service,
marketing, product
marketing
16
Apprentices
4
R&D
42
21
Quality
management
6
Procurement 43
and production
17
Human resources
• Strategic change in leadership
Brian McCann
Chief Sales &
Marketing Officer
• sales
• marketing
• product marketing
Stephan Offermanns
Chief Operating
Officer
• production
• logistics
• quality
• IT
• procurement
Brian L. Protiva
Chief Strategy Officer
Andreas G. Rutsch
Chief Financial Officer
• strategy
• research &
development
• corporate
finance/M&A
• controlling/treasury
• investor relations
• personnel
• legal affairs
18
Stock performance
Stock information
ADVA vs. NEMAX 50 Index
Euro
1.000
Number of shares
outstanding
5,157,725
Share price
EUR 180
(December 31, 2000)
800
Share price
600
EUR 495
(May 22, 2000)
400
Performance since IPO
1,446%
200
Market capitalization
EUR 900 million
0
29.03.99
(December 31, 2000)
29.07.99
29.11.99
29.03.00
Market capitalization
EUR 2.5 billion
(May 22, 2000)
Free float
27.5%
19
2000 annual shareholders’ meeting
• Increase in capital stock from corporate funds
• increase in common stock from EUR 5 million to
EUR 30 million
• stock split in the ratio of 1:5
• Creation of additional approved capital
• increase in equity capital by up to EUR 14 million
• up to EUR 3 million for cash contributions
• up to EUR 10 million for assets
• Stock option program 2000
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