IPTV Specialized Global Company
                                                  CORPORATE PRESENTATION
                 ...
Company Brief
                                                                1.   Capital & Shareholders Structure
      ...
Company Brief
     Capital & Shareholders Structure

     ■ KOSPI Listed Company                                          ...
Company Brief
  Core Competencies




■ Celrun‟s Unique Business Model                                                    ...
Company Brief
 Major Milestone



    TG USA                                                                              ...
Company Brief
  Major Affiliates & Subsidiaries



■ Business network of Celrun
  As of end of 2008, Celrun currently dire...
Highlights
                                                                1.   Outstanding Reference on IPTV
            ...
Highlights
 Outstanding Reference on IPTV/VOD STB




                            KT (Korea)
                             ...
Highlights
  Synergy Maximization as Celrun Group

■ Group matters straightened out
 •   B2B Group: Represented by Celrun ...
Highlights
 Blue-Print for Overseas Market Expansion

   Overseas subsidiaries

   Major domestic/overseas partners & buye...
Highlights
 Product Lineups (H/W)

■ VOD/IPTV STB Introduction

 •   VOD/IPTV STB with Progressive download & play technol...
Highlights
     Product Lineups(S/W)

■ H/E Solution
 •      Celrun developed end-to-end Head-end solutions by in-house Re...
Industry Overview
                                                                1.   IPTV/VOD Market Outlook
           ...
Industry Overview
 IPTV/VOD Market Outlook


■ World IPTV Market Outlook
Global IPTV subscribers reached 11 million in 200...
Industry Overview
 IPTV/VOD STB Market Share in Korea

■ Currently in Korea, three major Telcos serve IPTV/VOD market as o...
Strategic Approach
                                                                1.   Business Model Paradigm Shift
    ...
Strategic Approach
 Business Model Paradigm Shift

■ Major efforts were exerted on 1) re-grouping of existing business und...
Strategic Approach
  Marketing & Sales Shift

■ Attempts to focus on 2nd or 3rd Tier Telcos instead of 1st Tier Telcos, an...
Strategic Approach
  Next Growth Engine Pursuit


 ■ To avoid sales dependency on hardware and to tap into software busine...
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Celrun Corporate 2

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Celrun Corporate 2

  1. 1. IPTV Specialized Global Company CORPORATE PRESENTATION 1H 2009 Disclaimer Forward-looking statements in the presentation reflect Celrun’s current views with respect to future events and financial performance, and are subject to certain risks and uncertainties, which could cause actual results to differ materially from those anticipated. Although Celrun believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be attained. Celrun undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Language English
  2. 2. Company Brief 1. Capital & Shareholders Structure 2. Core Competencies 3. Corporate Milestones 4. Major Affiliates & Subsidiaries CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP.
  3. 3. Company Brief Capital & Shareholders Structure ■ KOSPI Listed Company ■ Issued Stock summary • Ticker 013240 • 1st Half end stock price : KRW 2,900(1H 09) VS KRW 2,110(2H 08) • Par Value per share : KRW 500 ■ Capital & Market Capitalization • BPS : KRW 1,398 in 1H 09 VS KRW 1,244 in 2H 08 • Capital: KRW 15.7 billion • Outstanding shares issued : 31,436,176 common shares • Market Capitalization : KRW 85 billions(As of end of 1H 2009) ■ Shareholders Structure (As of end of 1H 09 ) 1 1.8% 16.2% 1.7% 2.0% 6.2% 72.2% Dprotech CelrunSN TG Energy Shinhan PE Affiliate person Individuals 1 Dprotech of which major shareholder being Young Min Kim, current CEO of Celrun is major shareholder of Celrun Co., Ltd. Note: Percentile indicated in regard to shareholder structure above is only for illustrative purpose and may not be precise. CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP. 3
  4. 4. Company Brief Core Competencies ■ Celrun‟s Unique Business Model Comparative Advantage over other STB makers • Commercialization of Head-end solution with various patents including DRM/CAS for IPTV/VOD first time in Korea • Offer STB and Head-end solution as package deal → Increase dependence on vendor dramatically → Carry out project in partnership • Full spectrum of product portfolio from IPTV/VOD STB to hybrid Capability to establish business and strategic relationship for successful STB that allows satellite/Cable/Terrestrial signal?? implementation and operation with business partners • Launch of IPTV-enabled PC utilizing Trigem‟s H/W platform first in the world → Proposal to IPTV operators → Accommodation of Only Company with technology and Know-how from STB IPTV PC by IPTV operators in near future manufacturing to system integration in Korea Products lineups for state-of-the-art multiple media platform such as IPTV/Satellite/Cable etc. ■ 2008 Sales Breakdown : In-house solution Products Amount(KRW „000) % Commercially In-house end-to- development proven reliability end solution capability IP STB 70,442 53.8% IPTV PC 10,500 8.0% Price Competiveness secured by consolidation of procurement and VOD server 6,303 4.8% production activities with TG DMB/PMP 4,451 3.4% Intellectual Property Technological Technological Satellite STB 2,537 1.9% Protection for vital technologies ownership Breakthrough Others 36,612 28.0% Total 130,845 100.00% Continuous R&D Efforts CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP. 4
  5. 5. Company Brief Major Milestone TG USA Haansoft Woori Solar Subsidiary Acquisition Subsidiary Completed Skylife CAS Development & HD STB Supply Contract Conversion of OnTown (KRW 9.7 bil) TG Enregy AR Subsidiary into Equity KRW 33.6 bil Haansoft Supply Contract Share Purchase With OpenSat Lds Conversion of Cash Dividend Decision Agreement Hantle System AR into Equity Early Redemption of Acquired &TV KRW 30 bil CB Communications & KRW 15 bil stakes rights offering 2008 2009 Hybrid STB LG Dacom Supply Contract IPTV STB with Opensat(EU) Supply Agreement Educational IPTV Hybrid STB STB Supply Contract Supply Contract with Keysco with Freetech(US) (KRW 13 bil ) Selection as preferred negotiator for Skylife CAS provision Hanaro Telecom Call Option Exercised Among other things in the year 2008, management attention was focused on 1) straighten out group matters COMMENT including addition of subsidiaries and corporate governance reformation and 2) marketing efforts in order to diversify source of sales revenues, expected to be recorded as sales in the year 2009. CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP. 5
  6. 6. Company Brief Major Affiliates & Subsidiaries ■ Business network of Celrun As of end of 2008, Celrun currently directly or indirectly has stakes in a total of 26 subsidiaries and affiliates including Trigem, CelrunSN and TG Energy. Through synergy out of these affiliates and subsidiaries, current management of Celrun seeks to achieve strategic goal of Celrun and its affiliates and subsidiaries as a group. (unit : KRW bil) Company Name Listing Capital Sales in1H ’09 Main Business Operation Celrun KOSPI 15.7 34.7 IPTV/VOD solution & Set-top-box(STB) TG Computer Non-listed 94.4 360 PC/Navigation/PMP Haansoft KOSDAQ 12.2 12.9 Software Bundle / Thinkfree Celrun SN KOSDAQ 14.1 7.4 Digitial Contents / Optic Communication TG Energy KOSDAQ 12.8 2.2 ILM / Dye-sentisized Solar Cell Dprotech Non-listed 13.2 1.6 Development of IPTV Head-end solution IDCTech Non-listed 3 2.8 Kiosk manufacturing & distribution OnTown Non-listed 0.03 0.7 Digital Contents / wholly owned by CelrunSN TG USA, TG Japan, Including overseas entities of Trigem currently TG GmbH, TG Non-listed N/A N/A under liquidation process Philippines, etc GROUP NETWORK CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP. 6
  7. 7. Highlights 1. Outstanding Reference on IPTV 2. Synergy Maximization as Celrun Group 3. Blue Print for Overseas Market Expansion 4. Product portfolio – Part 1(H/W) 5. Product portfolio – Part 2 (S/W) CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP.
  8. 8. Highlights Outstanding Reference on IPTV/VOD STB KT (Korea) Local IPTV/VOD Market Weather Map High and low-priced STB passed rigorous KT Bench-mark testing(BMT) - Function : SD/HD VOD, Multicasting, Internet, Display Phone, Game - Sales : 6,700 (Head-end S/W) UPS (Japan) Successfully developed and commercialized TD700 model for United Power System (UPS) in Japan in 2001 - Function : VOD, T-commerce, VoIP, Home Security - Sales : 100,000+ Target subscriber Target Subscriber Target Subscriber 1.2 mil 1.2 mil 0.5 mil Leopalace21 (Japan) Delivered 350K units with MPEG1/2, IPTV VOD, internet browsing Streaming Samsung 25% functions for Leopalace21 BB service since October 2001 Progressive D&P Progressive D&P - Function : VOD, Multicasting, Internet, VoIP, etc. Celrun 80% Celrun 90% Humax 25% - Sales : 500,000+ Dasan Network 25% Maginet (Korea, Singapore) D&P Mirinet 12.5% Celrun and MagiNet delivered Hotel VOD system together in many 5 Maverick 12.5% Hyundai digital star hotels located in Asia tech 20% Gaonmedia 10% - Function : VOD, Multicasting, Internet, etc STB Vendor Accumulative STB Vendor Accumulative - Sales : 50,000+ STB Vendor Accumulative Unit Delivery % Unit Delivery % Unit Delivery % Hanarotelecom (Korea) †Source: Company estimate Exclusive STB vendor for HanaTV, Hanarotelecom TV portal service for 2 years since service commemoration (March 2006 ~ March -2008) ■ IPTV/VOD STB Unit Accumulative Delivery : Function : HD VOD, HDTV, Karaoke, Game - Sales : Over 1,000,000 units Over 2 Million Units CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP. 8
  9. 9. Highlights Synergy Maximization as Celrun Group ■ Group matters straightened out • B2B Group: Represented by Celrun and Consisted of Celrun SN, Dprotech, IDC Tech • B2C Group: With Trigem at the center together with TG Service, TG Energy and Overseas TG subsidiaries • Collaboration on business feasible enough to create synergy between members of Celrun Group and Efficiency Improvement through integration of procurement and manufacturing by TGK B2B Group B2C Group Collaboration on Business Enhance mutual Development cooperation on business capable of TG Overseas driving synergy Subsidiaries Procurement/ Manufacturing Integration CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP. 9
  10. 10. Highlights Blue-Print for Overseas Market Expansion Overseas subsidiaries Major domestic/overseas partners & buyers CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP. 10
  11. 11. Highlights Product Lineups (H/W) ■ VOD/IPTV STB Introduction • VOD/IPTV STB with Progressive download & play technology – Overcomes Existing problems of Bandwidth Issues which optimize Telco‟s CAPEX Efficiency • Hybrid STB that blends Satellite and IP, Terrestrial and IP – Selling point for existing platform market not only IPTV markets • IPTV PC that combine Celrun‟s IPTV Solution / Technology and Trigem‟s Computer Hardware – Ultimate Substitute Product for High-end STB with Telco‟s IPTV solution embedded • MMP that allows DivX play – As a B2C product for early adapter only, attempt to secure marketability by utilizing Trigem‟s distribution networks PRODUCT HIGHLIGHTS Hybrid STB: Terrestrial +IP / MMP: Multimedia Player Satellite + IP / Audio IP STB Buffer & Play IPTV STB VOD only STB Business Partner providing Progressive Download & Play end-to end solutions including IPTV STB H/E, CAS solutions CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP. 11
  12. 12. Highlights Product Lineups(S/W) ■ H/E Solution • Celrun developed end-to-end Head-end solutions by in-house Research & Development center which earns successful IPTV commercialization reference and know-how by launching Celrun TV of which stake subsequently were sold to SK Broadband & TV(previously Hanara Media) • Celrun‟s CAS were successfully delivered to Skylife for simulcrypt with NDS – the only commercialization reference amongst locally developed CAS that meets up government policy toward CAS. H/E solution workflow H/E solution detailed composition CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP. 12
  13. 13. Industry Overview 1. IPTV/VOD Market Outlook 2. IPTV STB M/S in Korea CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP.
  14. 14. Industry Overview IPTV/VOD Market Outlook ■ World IPTV Market Outlook Global IPTV subscribers reached 11 million in 2007 and are expected to reach 62 million subscribers by 2012 with US$ 1.8 billion IPTV revenue in 2007 and US$ 17.5 billion by 2012. ■ Korea IPTV Market Outlook In Korea, IPTV Subscribers in 2007 reached 1.13 million and in 2012 are expected to increase up to 3.48 million while IPTV Revenue in 2007 US$ 31.75 million and US$ 314.17 million in 2012. World IPTV Market Outlook Korea IPTV Market Outlook IPTV Subscribers (thousand people) IPTV Subscribers (thousand people) IPTV 수익 (million USD) IPTV 수익 (million USD) Source : Ovum (2008) Source : Ovum (2008) ■ IPTV growth trend ■ Group classification according to IPTV growth rate Fast Developing Group Developing Group Slow Developing Group IPTV industry growth trend is most likely to occur worldwide, however, given infrastructure status for Australia, China, Denmark, Austria, Baltic States, Belgium, Canada, Finland, Germany, Greece, Brazil, India, Indonesia, each country and market situation, different growth Czech, Greece, France, Hongkong, Hungary, Ireland, Israel, Italy, Malaysia, Mexico, Philippines, trend is foreseeable in different countries. Table to the Korea, Norway, Portugal, Singapore, Japan, Netherland, New Zealand, South Africa, Thailand, Turkey, Sweden, Swiss, Taiwan Poland, Russia, Slovakia, Spain, Ukraine Vietnam right supports just that point, according to recent UK, USA research paper released by Ovum. Characteristics per each Group Countries with existing IPTV Geographic coverage, Inadequate Communication marketing and thus less CAPEX High CAPEX requirement, and time consuming Infrastructure time consuming ※ Grouping Criteria : IPTV Revenue Level for each countries, broadband status, Competitive status on Digital TV platform CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP. 14
  15. 15. Industry Overview IPTV/VOD STB Market Share in Korea ■ Currently in Korea, three major Telcos serve IPTV/VOD market as of 1H 2009. Namely, these Telcos are SK Broadband(Previously Hanaro Telecom), KT(Korea Telecom), and LG Dacom. 공급수량†† M/S Units Shipments 1,200,000 60.0% 50.9% Celrun position strengthened 1,000,000 50.0% • M/S of approximately 51% at 2008 year end • Virtually monopolistic position with Broad & TV 800,000 40.0% • Supply contract with myLGtv at 2008 year end 600,000 25.4% 30.0% expects to contribute more M/S gains • 2009 onward, due to government aggressive IPTV 400,000 20.0% policy, Educational IPTV market is expected to 10.2% 10.2% vitalized other than Telco IPTV market 200,000 0.3% 0 0 1.5% 1.5% 10.0% • Overseas market revitalization most likely to occur - 0.0% 2010 and afterward with current economic situation Hyundai Dasan LG 셀런 Celrun 현대디지털텍 Digital Tech 삼성전자 Samsung 휴맥스 Humax 다산네트워크 Networks 미리넷 Millinet 메버릭 Maveric 엘지전자 Electronics 가온미디어 Gaon Media VOD/IPTV STB M/S Status based on accumulative shipments in 2008 IPTV Service Accum. Subscribers VOD/IPTV Type Vendor Policy Vendor Shipments†† M/S Remarks Progressive 1st vendor Celrun 1,000,000 50.9% Broad & TV 800,000 † download & play 2nd vendor Hyundai Digitaltech 5,000 0.3% Samsung 200,000 10.2% Streaming Dual vendor Humax 200,000 10.2% QOOK TV 800,000† 1st vendor Dasan Networks 500,000 25.4% (Previoulsy MegaTV) Progressive 2nd vendor Millinet - download & play 3rd vendor Maverick - Progressive 1st vendor LG Electronics 30,000 1.5% myLGtv 50,000† download & play 2nd vendor Gaon Media 30,000 1.5% † Company Estimates 1,965,000 †† Estimates including inventory CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP. 15
  16. 16. Strategic Approach 1. Business Model Paradigm Shift 2. Marketing & Sales Shift 3. Next Growth Engine Pursuit CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP.
  17. 17. Strategic Approach Business Model Paradigm Shift ■ Major efforts were exerted on 1) re-grouping of existing business under B2C group and B2B group and 2)integration of procurement and manufacturing in order to maximize efficiency. As a result, navigation business was transferred to relevant subsidiary and enhanced main business, end-to-end H/E solution and STB specialty company. Existing Business Model Enhance Existing BM (B2B & B2C in mingle) Existing Business Model Enhanced (B2B only) Hybrid STB (Export only) B2B B2C CAS for Satellite B2B (Simulcrypt) IPTV/V OD STB Choice & Focus Hybrid H/E STB Celrun Solution Navigation MMP CAS (Conditiona l Access System) PMP Transfer of business to relevant subsidiaries CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP. 17
  18. 18. Strategic Approach Marketing & Sales Shift ■ Attempts to focus on 2nd or 3rd Tier Telcos instead of 1st Tier Telcos, and aggressive expansion into open market. Marketing activities focusing on establishment of long term partnership by Head-end solution provision not only STB shipments Major partners & buyers in Korea Overseas major partners & buyers Cavalier Alliance Gold Line Opensat SKB KT LG Dacom ONSE Leopalace21 &TV United Power Communications USEN NEO Index Mcom TIT TransAct M2B MITV Maginet CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP. 18
  19. 19. Strategic Approach Next Growth Engine Pursuit ■ To avoid sales dependency on hardware and to tap into software business, esp. CAS business which deems to be of indefinite growth potential, Celrun will continue to find ways to expand business in CAS for next growth engine. ■ By developing and successfully implemeting in-house developed CAS simulcrypt with world CAS market leader NDS which currently in place for Skylife known worldwide for its complex service structure, Celrun expects this simulscrypt implementation as a turning point for aggressive oversea market tapping World & Domestic CAS Market Estimates Classification 2009 Market Size(E) 2012 Market Size(E) CAGR World CAS Market Approx. KRW 1.2 tril Approx. KRW 1.6 tril 5.9% Domestic CAS Market Approx. KRW 100 bil Approx. KRW 270 bil 22.0% World CAS Market in 2008 & Market Share Domestic CAS Market in 2008 & Market Share 9% 4% 8% 10% 33% 5% 13% 16% 73% 29% NDS Nagravision Motorola Irdeto Scientific Atlanta Others NDS CONAX Irdeto Others CELRUN HAS BEEN A TRUE LEADER IN NOT ONLY PRODUCT DEVELOPMENT BUT ALSO IN PROVISION OF TOTAL SOLUTION FOR IPTV STP. 19
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