Descartes: Trusted Solutions For Logistics

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Descartes Trusted Solutions For Logistics
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Safe Harbor Language

• Portions of todays presentation will contain
  forward-looking statements relating to the
  companys operations, its expected quarterly
  results and its future prospects. These
  statements are neither promises nor guarantees,
  but are subject to risks and uncertainties that
  could cause actual results to differ materially
  from those contained in the forward-looking
  statements, including without limitation the
  uncertain economic environment, the companys
  ability to successfully implement cost
  containment measures, the companys limited
  operating history and its history of losses,
  uncertainty and unanticipated delays in closing
  customer orders, the companys dependence on an
  emerging market characterized by rapid
  technological change, the acceptance of the
  companys revenue models in the market,
  management of growth, integration of recent and
  potential acquisitions, significant fluctuations
  of quarterly operating results and international
  sales and interest in exchange rate fluctuations.
  Forward looking statements involve risks and
  uncertainties and are inherently speculative and
  our actual results may differ significantly due
  to a number of factors that are discussed more
  fully in the section entitled "Risk Factors'' in
  documents filed with the Securities and Exchange
  Commission, the Ontario Securities Commission and
  other securities commissions across Canada,
  including the Company's Annual Information Form
  dated June 19, 2001 and in the MDA section of
  our FY2001 Annual Report. The company disavows
  and disclaims any obligation to update or
  supplement any of these forward looking
  statements. None of the statements made in
  today's presentation should be construed as a
  solicitation to purchase common shares of the
  Company.

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Descartes Snapshot

• Market-Leading Network Software Logistics
  Management Solutions
• FY/02 Revenue of 79.5 Million
• 5-Year CAGR of 58
• 201M in Cash and Investments
• 4,000 Customers in 60 Countries
• 630 Employees World-wide
• 35 Reseller Partnerships
• TSE DSG, NASDAQ DSGX

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Decades of Logistics Experience

• Company incorporated in 1981
• 20 Years in High-Velocity Manufacturing and
• Retail Distribution
• 18 Years in Trucking
• 15 Years in Ocean
• 12 Years in Air Cargo

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Who Is Descartes?

• We are the pioneer and leader in network-based
  information management for logistics.
• Our philosophy revolves around bringing
  manufacturers, distributors, retailers,
  transportation carriers and logistics third
  parties together in a shared services
  environment.
• Buyers and sellers of logistics services need to
  work closely together, sharing source data on
  plans, capabilities, costs and service
  constraints, while using real-time event
  information to dynamically optimize the flow of
  goods.

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What Are We Focusing On?

• Improving Inter-enterprise Logistics Activities
• Lowering Transportation Costs
• Lowering Inventory Costs and Reduce Lead Times
• Improving Customer Service Levels

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The Market Opportunity

• Global logistics represents nearly 10 (US 1.7
  trillion) of the world's gross national product.
• In November, AMR Research reported that
• 78 of potential users surveyed planned to
  increase or maintain their spending levels in
  logistics solutions in North America.
• 84 of potential users in EMEA planned to
  increase or maintain their spending on logistics
  solutions.
• Logistics Survey Results Customer Focused
  Initiatives Receive Top Priority, November 2001

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Solutions Overview
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Acquisition Strategy
Reach of the GLSN
DSG
Tradevision
Breadth of Logistics Applications
1981
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Unequaled supply chain reach.

• 47 of the top 50 less-than-truckload (LTL)
  carriers
• 7 of the largest food and drug retailers
• 150 of the Global 500 companies connected
• 13 of the top 15 third party logistics companies
• 10 of the top 10 electronic and high tech
  companies
• 50 of the top 50 air messaging providers
• 11 of the top 20 ocean carriers
• 70 of ground transportation messaging in North
  America
• Approximately 80 of the North American air
  cargo messaging
• 50 of the worldwide air cargo messaging.

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Global Customer Base
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Revenue Analysis Q4 and FY 2002
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Revenue Summary
Network Revenues
Software Revenues
US MM Revenue
US MM Revenue
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Discussion Area 1Transition to a Network
Pricing Model

• Effective Feb 26, upfront license fees for
  Network products were eliminated and are priced
  on a subscription and per transaction fees.
  Benefits
• Improved predictability of Revenues
• Long-term revenue and earnings growth
• Increased quality of transaction fees

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Discussion Area 2Market Coverage Model

• Direct Sales
• Geographic coverage

Est 250M Ann Rev

• Indirect Sales
• Geographic coverage
• Vertical market coverage

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Proposed Channel Partner Map
Direct Sales
Network Partners Syndicate Partners 3PLs
Distributors VARs Network Partners
Telcom Partners etc
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Thank You

• The Descartes Systems Group Inc.