© Ciena Confidential and Proprietary...
Transcript of © Ciena Confidential and Proprietary...
© Ciena Confidential and Proprietary
Welcome to Ciena’s Analyst Day 2008
Today’s presentations/Q&A sessions are being webcast live and will be recorded and archived on Ciena.com
Members of the press/media are in attendance
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Forward-looking statements
Comments made during this presentation may contain forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties. These statements are based on information available to the Company as of the date of this event, October 7, 2008; and Ciena’s actual results could differ materially from those stated or implied, due to risks and uncertainties associated with its business, which include the risk factors disclosed in its Report on Form 10-Q filed with the Securities and Exchange Commission on September 5, 2008.
Forward-looking statements include statements regarding Ciena’s expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,”“expect,” “intend,” “may,” “should,” “will,” and “would” or similar words.
Ciena assumes no obligation to update the information presented today, whether as a result of new information, future events or otherwise.
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Execution & Strategy
Gary Smith President & CEO
October 7, 2008
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Discussion points
Level setEnvironmental overviewStrategy/positioning
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Why Ciena?(from October 2, 2007 – last year’s analyst day)
Thematic playBenefiting from significant demand drivers and positioned to capitalize on a sizable infrastructure cycle Product cyclesDeveloping new products/features designed to drive future growthRevenue growthDelivering faster than market growth as a result of targeting high growth segments and taking shareOperating leverageImproving financial performance with a stabilizing business model
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Thematic play
The waves: PDH SONET/SDH Ethernet
Infrastructure Investment
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250
225
200
175
150
125
100
75
50
25
0
Rev
enue
in m
illio
ns (U
SD
)
Q4’
06
Q1’
07
Q2’
07
Q3’
07
Q4’
07
Q1’
08
Q2’
08
160M
242MG
rowth %
50
45
40
35
30
25
20
15
10
5
0
42%Ciena growth
24%Target market growth
Q3’
08
253M
Product cyclesEnabling market share gains
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Revenue growth
Mobile Backhaul
Managed Service
MetroNetworking
Core Transport
Core Switching
Expanding relationships
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Revenue growth
2005 2006 2007 2008
21CN
GlobalServices
EthernetAccess
WiMaxDeployment
(N.AmericaService Provider)
Ethernet Access(N.European
Service Provider)
Carrier EthernetBusiness Services
(Latin AmericanService Provider)
IPTVDeployment
(Int’l PPT)
Forging new relationships – some examples
Carrier EthernetBusiness Services
(N.American MSO)
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Operating leverage – to date
* As-adjusted OPEX excludes certain GAAP charges such as stock comp as set forth in our quarterly press releases
45%52%
7%Op Margin
15%Op Margin
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Target business model
R&D
Sales & Mktg
G&A
12.5% 15.5%
12.5% 15.5%
4.5% 5.0%
15%As-adjusted operating profit target
(range as % of revenue)
−
−
−
* As-adjusted” operating profit excludes certain GAAP charges such as stock comp as set forth in our quarterly press releases
Revenue
Gross Margin
Grow faster than the market
High 40’s moving into low 50’s over time
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Y/Y revenue growth rate comparison
Note: A constant exchange rate has been used for companies reporting in foreign currencies to remove impact of currency fluctuation. Industry average calculated from a larger basket of companies than those displayed.
Industry conditions and the larger economic crisis have caused an abrupt slowdown in our business and that of our competitors.
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Market/demand trendsDespite macroeconomic concerns, most top-tier service providers financially healthy Traffic demand remains fundamental CAPEX driverWireless services are key revenue growth driver for top-tier, diversified customers
Source: Cisco
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Top questions
1. Are the current conditions different from 2001-2002?
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Top questions
1. Why is this different from 2001-2002?2. What gives you confidence this slowdown will be short-lived?
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Top questions
1. Why is this different from 2001-2002?2. What gives you confidence this slowdown will be short-lived? 3. What happens if it’s not short-lived?
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Top questions
1. Why is this different from 2001-2002?2. What gives you confidence this slowdown will be short-lived? 3. What happens if it’s not short-lived?4. How will you know either way?
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Top questions
1. Why is this different from 2001-2002?2. What gives you confidence this slowdown will be short-lived? 3. What happens if it’s not short-lived? 4. How will you know either way?5. When will you know?
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The evolution of Ciena innovation
First…
We made the transport network
flexible, automated and resilient
Transport
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The evolution of Ciena innovation
Then…
We combined the economics of Ethernet with our heritage of resilient transport
EthernetTransport