Title: ADVA AG Optical Networking 2001 Extraordinary Shareholders Meeting
1ADVA AG Optical Networking2001 Extraordinary
Shareholders Meeting
- Brian L. Protiva, Chief Strategy Officer
- Andreas G. Rutsch, Chief Financial Officer
- February 8, 2001, Meiningen
2Company overview
- ADVAs positioning in the market space
- Leading global provider of metro area and
enterprise optical networking solutions - Leveraging core technology to address exploding
market for metro - Aggressive organic growth and acquisition
strategy - Clearly differentiated from competitors
- Technological expertise
- Broad product portfolio for enterprise and metro
networks - Blue-chip OEM partners and direct sales force
- State-of-art manufacturing capabilities
- Experienced management team
3Optical networking market segments
CP Customer Premise, POP Point of Presence, CO
Central Office
4Optical networking growth trends
Global optical networking opportunity
Growth in market segments from 2000 to 2004 (CAGR)
()
Source RHK 1999
Source Pioneer 2000
5Broad product portfolio
Product portfolio
Product pipeline
FSP 3000 enhancements
central office
FSP 3000
FSP 500
customer premise
CP Customer Premise, POP Point of Presence, CO
Central Office
6Solution benefits
- Enterprises
- enable storage networking across the MAN and WAN
- scale Gigabit and ATM applications in the MAN
- extend broadcast video over the WAN
- low total-cost-of-ownership
- reduce expenditures on dark fiber infrastructure
- Service providers
- create new revenues with managed high-speed LAN
services to address high-growth opportunities - expand metro network services to the WAN
- scale metro core network capacity
cost-effectively - reduce expenditures on dark fiber infrastructure
for enterprise services
7Company strategy
- Maintain and expand technology leadership in
enterprise segment - Leverage enterprise expertise to address metro
market demand - Facilitate growth through strategic relationships
and acquisitions - Expand sales and distribution channels
- Leverage expertise in manufacturing of optical
networking systems
8Expanding customer base
Service providers
Enterprises
End-user customers
- Fortune 1000, banks, automobile manufacturers,
insurance agencies, industrial and high-tech
companies
Source ADVA
9Sales strategy
OEM partners
VARS and distribution partners
Direct
- Increasing direct ADVA sales force
- Key enterprise and service provider customers
- Business development team provides network
consulting and RFQs/RFPs
10Financial highlights
Thousands of Euro, except earnings per share and
number of employees Unaudited, according to U.S.
GAAP
Pro forma consolidated financial results are
calculated excluding purchased in-process RD,
amortization of goodwill and depreciation of
purchased intangible assets resulting from
acquisitions, as well as non-cash charges related
to the stock option program.
112000 operational highlights
- OEM agreements with Cisco and Siemens
- 3-year contracts with Verizon, British Telecom,
Swisscom and Torch Telecom - Strategic marketing relationships with Brocade,
Compaq and EMC - Establishment of presence in Tokyo, China, Mexico
and Chile - 2000 Market Engineering Product Line Strategy
Award from Frost Sullivan - Completion of RD and production facility
- Aggressive acquisition and investment strategy
- SAN Ltd.
- Cellware Broadband GmbH
- First Fibre Ltd.
- Siemens Norway Telecom RD Team
- OptXCon Inc.
12Human resources
ADVA employees worldwide 1997 - 2000
ADVA employees worldwide 2000 total - 398
13Investor relations
ADVA stock price performance March 1999 -
February 2001
adjusted for capital increase (effective 15
stock split)
14Investor relations
ADVA stock price performance vs. optical
networking peers during 2000
- ADVA stock price performance vs. Neuer Markt
peers during 2000
Source www.neuer-markt.de
Source www.nasdaq.com
15Overview of agenda items
- TOP 1 Stock option program 2001
- TOP 2 Stock option program UK
- TOP 3 Employee option bond program 2001
- TOP 4 Supervisory Board convertible bonds 2001
- TOP 5 Amendment of Articles of Association
- TOP 6 Convertible and option bonds
16Employee participation
Close integration with rise in company valuation
- recruitment of top-quality talent
- involvement in opportunities and risks
- retaining through financial incentives
- minimization of cash outflow for personnel
expenses - open, dynamic company culture
- transparent, regular flow of information
- decentralized, flat organizational hierarchy
- consideration of employee structure and hierarchy
- further development/adjustment to actual company
development - orientation to international expectations
- supplementation of fixed and variable
compensation packages
Intangible factors
Adaptation and flexibility through growth phases
17Program overview
prior to IPO
at the time of IPO
after IPO
Requirements/ goals
- Recruiting top-quality leadership expertise
- Retaining liquidity
- Management
- Recruiting technical and management expertise
- Motivating/ incentivizing employees
- All employees
- Recruiting technical and management expertise
- Motivating/ incentivizing employees
- Acquisitions
- Management/ leadership
- Employees
- Supervisory Board members
Participants
Existing shares
Stock options
Stock options/ option bonds/ convertible bonds
18Program overview