ADVA Optical Networking
Andreas G. RutschChief Financial Officer
May 31, 2006Credit Suisse European Technology Conference
Barcelona, Spain
© 2006 ADVA Optical Networking. All rights reserved.2
Market overview
15%
3-year CAGR
25%
23%
Total optical WDM + Ethernet access market
2005: USD1.3 bn
32%
57%
11%
Sources: Dell'Oro, Infonetics, RHK and ADVA internal estimates - April 2006
© 2006 ADVA Optical Networking. All rights reserved.3
Market growth drivers
! Core router and switch interconnect ! OTN based wavelength services! Integration of all legacy networks! Relief for fiber exhaust
! Core router and switch interconnect ! OTN based wavelength services! Integration of all legacy networks! Relief for fiber exhaust
! DSL, PON and wireless backhaul! High speed business customer access! Intelligent Ethernet services
! DSL, PON and wireless backhaul! High speed business customer access! Intelligent Ethernet services
! Corporate backbones! Grid computing! LAN extension
! Corporate backbones! Grid computing! LAN extension
! Business continuity! Disaster recovery! SAN extension
! Business continuity! Disaster recovery! SAN extension
© 2006 ADVA Optical Networking. All rights reserved.4
Competitors
! Simplified architecture! Strong 10G and
optical architecture! Lowest TCO! Established
channel strategy
! Optimizedproduct family
! All protocols! Storage qualifications! Lowest TCO! Established
channel strategy andcustomer base
! FSP 2000 feature set! Storage qualifications! Ease of use! Lowest pricing! Established
customer base
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Primarycompetitors
Marketsegments
OurADVAntage
© 2006 ADVA Optical Networking. All rights reserved.5
Sales distribution strategy
DIRECT VAR OEM
! Application focus
! Technology partnership
! Complete FSP solutions
! Regional focus
! Vertical segments
! Long relationships
! Installed base
! NMS integration
! Long relationships
© 2006 ADVA Optical Networking. All rights reserved.6
IFRS consolidated quarterly financial performance
Netliquidity
(millions of EUR)
10.412.2
13.8
Sep-05 Dec-05 Mar-06
Pro forma operating income*
(millions of EUR)
5.75.15.6
Q3 2005 Q4 2005 Q1 2006
37.135.833.7
Q3 2005 Q4 2005 Q1 2006
Revenues and gross margin
(millions of EUR, % of revenues)
Pro formanet income*
(millions of EUR)
4.0 3.6 3.8
Q3 2005 Q4 2005 Q1 2006
16.5(49.1%)
17.8(49.7%)
17.8(47.8%)
* Note: Pro forma operating income is calculated prior to non-cash charges related to the stock option programs and amortization and impairment of goodwilland acquisition-related intangible assets
© 2006 ADVA Optical Networking. All rights reserved.7
Our ADVAntage
Speed for customers
!Responsive team
!Customized delivery
!Global coverage
People
!Experienced
!Visionary
!Approachable
Optical+Ethernet innovation
!Scalable optical transport
!Intelligent Ethernet access
!Cost-effective end-to-end networking
The networking solutions partner for all high-speed data, storage, voice and video applications.
The networking solutions partner for all high-speed data, storage, voice and video applications.