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Jan 2014 Annual Meeting AGM- Germain Lamonde
- 2. Forward-Looking Statements
Certain statements in this presentation, or given in response to your questions, may constitute
forward-looking statements within the meaning of the Securities Act of 1934. The Private
Securities Litigation Reform Act of 1995 provides âsafe-harborsâ for such forward-looking
statements and we intend that any forward-looking statements made today be subject to the
safe harbors. We caution you that any forward-looking statements are just predictions. They
are not guarantees of future performance and involve risks and uncertainties. Actual results
may differ materially from those projected in forward-looking statements and we invite you to
review the companyâs most recent filings with the Securities and Exchange Commission or
Canadian securities commissions for a discussion of the factors at risk. These forward-looking
statements speak only as of the date of this presentation and, unless required by law or
applicable regulations, we will not be reviewing or updating the material that is contained
herein.
Annual financial data in this presentation is prepared in accordance with international financial
reporting standards (IFRS) and Canadian generally accepted accounting principles (GAAP).
Quarterly financial data is prepared in accordance with IFRS. For a reconciliation of adjusted
EBITDA to net earnings (loss), refer to the Q1 2014 press release or the âNon-IFRS Measuresâ
section on EXFOâs website.
© 2014 EXFO Inc. All rights reserved..
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- 3. FY 2013 Financial Highlights
âșAnnual sales: $242.2 M (-3.1% YoY)
âș R&D investments more in «key technology
platforms»; less on «incremental innovation»
âșGained market share despite tough markets
âșIFRS net earnings: $1.3 M (-$3.6 M in 2012)
âșCost savings of $9.0 M YoY
âșAdjusted EBITDA*: $17.3 M (7.2% of sales)
âșAdjusted EBITDA margin flat YoY
* Adjusted EBITDA represents net earnings before interest, income taxes, depreciation and
amortization, restructuring charges, stock-based compensation costs and foreign exchange
gain.
© 2014 EXFO Inc. All rights reserved..
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- 4. Segmented Sales â FY 2013
âș Physical-layer sales increased 4.3% YoY
âș Protocol-layer sales decreased 11.3% YoY
Americas
âșSales: $128.1 M
âșGrowth YoY: -2.3%
âșSales Split: 53%
EMEA
âșSales: $67.0 M
âșGrowth YoY: -6.0%
âșSales Split: 28%
Asia-Pacific
âșSales: $47.0 M
âșGrowth YoY: -1.0%
âșSales Split: 19%
© 2012 EXFO Inc. All rights reserved.
2014
reserved..
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- 6. Progress Against Growth Strategy
âșSales to wireless customers
reached 28% of sales in 2013
âșLaunched key new products
âșReady for small cell opportunity
© 2012 EXFO Inc. All rights reserved.
2014
reserved..
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- 7. Progress Against Growth Strategy
âșAcceptance of EXFO Connect
âșOptical & Ethernet combination
âșExtended iOLM for DAS & FTTA
âșOne-click diagnostics on protocol
analyzers
© 2012 EXFO Inc. All rights reserved.
2014
reserved..
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- 8. Progress Against Growth Strategy
âșOTDRs: ~50% market share
âș100G test solutions: Top 7/15
carriers
âșTravelHawk Pro: Top 3/5 LTE
carriers
âșMaxTester: Top-3 NA carriers
âșEXFO Connect progression
© 2012 EXFO Inc. All rights reserved.
2014
reserved..
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- 9. Progress Against Growth Strategy
âșReduced OPEX by $9.0 M
âșMaintained tight cost controls
âșAdj. EBITDA margin* of 7.2%
(flat YoY)
* Adjusted EBITDA represents net earnings before interest, income taxes, depreciation and amortization, restructuring charges, stock-based
compensation costs and foreign exchange gain.
© 2012 EXFO Inc. All rights reserved.
2014
reserved..
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- 10. Looking to the Future ...
Small Cells,
VoLTE & 4G
Networks
âą Small cells, DAS & RRH are
key to complement macro-cells
âą VoLTE critical roll-out in 2014
âą 4G/LTE still in early innings
High-Speed
Broadband
Networks
âą From 10G to 40G, 100G and
400G field trials
âą Major upgrades to IP network
infrastructures
EXFOâS PORTFOLIO ALIGNED WITH GROWTH VECTORS
© 2014 EXFO Inc. All rights reserved..
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- 11. Focus on Execution
INNOVATION
âșGame-changing solutions
âșSolve real-life issues for customers
OPERATIONAL EXCELLENCE
âșEfficiency and execution
âșTight control on expenses
âșLeverage higher-margin SW solutions
PROFITABLE GROWTH
âșGrow profitability faster than revenue
STAY THE COURSE AND EXECUTE FLAWLESSLY
© 2014 EXFO Inc. All rights reserved..
11
- 12. Headwinds & Tailwinds
Headwinds
âșUncertain economic conditions
âșChallenging end-markets
âșSome carrier investments in 2013
were delayed (especially in the
Americas)
Tailwinds
âș3G, 4G/LTE deployments
âșSmall cells and network density
initiatives (DAS, RRH)
âșMobile backhaul upgrades
âș100G network rollouts
âșPair bonding and vectoring on
copper links (100 Mbit/s)
© 2014 EXFO Inc. All rights reserved..
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- 13. Medium-Term Target
* Adjusted EBITDA represents net earnings before interest, income taxes, depreciation and amortization, stock-based compensation costs
and foreign exchange gain or loss.
BALANCE BETWEEN SALES GROWTH AND PROFITABILITY
© 2014 EXFO Inc. All rights reserved..
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- 14. Q1 2014 Highlights
âș Sales totaled $56.0 M (book-to-bill ratio of 1.03)
âș Sales increased YoY in EMEA and A-PAC, but decreased in
the Americas
âș Gross margin1 reached 62.2% (up YoY)
âș Adjusted EBITDA2 amounted to $2.3 M (down YoY)
âș Cash flows from operating activities totaled $3.3 M (up YoY)
1Gross
margin is a non-IFRS measure and represents sales less cost of sales, excluding depreciation and amortization.
EBITDA represents net loss before interest, income taxes, depreciation and amortization, stock-based compensation costs
and foreign exchange gain.
2Adjusted
© 2014 EXFO Inc. All rights reserved..
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