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DASAN Networks IR Presentation 1Q 2018.

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Presentation on theme: "DASAN Networks IR Presentation 1Q 2018."— Presentation transcript:

1 DASAN Networks IR Presentation 1Q 2018

2 Disclaimer The financial information and business results herein are provided for investor’s convenience, which have not yet been reviewed by external auditors and some figures may be able to be changed according to the audit outcomes. Forecasts and projections contained in this material are based on current business environments and management strategies. They may differ from the actual results depending on changes and unaccounted variables, therefore DASAN Networks. Inc. does not undertake any obligation to the investment results from those in the forward-looking statements. The responsibility for investment is ascribed only to investors. These materials can not be used as evidence in any legal dispute. The financial information and business results in this document are based on K-IFRS.

3 Contents P.4 P.5 P.6 P.7 P.8 P.9 P.11 P.14 P.15 1. History
Company history and highlights 2. Shareholders P.5 Shareholders composition in the last five years, major shareholders holding 5% and above, current status of convertible bonds 3. Organization P.6 Corporate governance, affiliated companies and organization structure map, overview of DASAN group 4. Product and Solution P.7 Business area and product solution 5. Business Composition P.8 Sales breakdown by geography and products 6. Overseas Biz Status P.9 Main progress, global location, customers 7. Subsidiaries P.11 Market share and product solution of subsidiaries 8. Overall Performance P.14 The progress of business performance and financial results in the last four years 9. Vision P.15 Mid to Long-term vision

4 1. History The No.1 Network Solution Provider in Korea
Growth led by expanding our business into global market and diversification since 2009 Foundation / Localization of Network Equipment ( 1993~2003 ) (1993) · Established DASAN Engineering Co., Ltd. (1995) · Established DASAN R&D Institute (1998) · Developed Korea’s first Frame Relay Router in Korea (1999) · Changed the company name to DASAN Internet, Inc. (2000) · Released General-Purpose Network Solutions (Router, Ethernet Switch, xDSL solution) · KOSDAQ-listed as DASAN Internet (2001) · Developed & Commercialized Linux based L2 Switch for Korean Market (2002) · Changed the company name to DASAN Networks, Inc. · Developed & Commercialized L3 Metro Ethernet Switch (2003) · Released VDSL IP-DSLAM Became the No.1 Network Solution Provider ( 2004~2011) (2004) · Investment from SIMENS · The largest shareholder changed from Mr. MinWoo Nam to SIEMENS (2005) · Released ADSL2 IP-DSLAM for Global Market (2007) · No.1 FTTH EPON & IP-STB provider to KT in Korea (2008) · Became an affiliate of DASAN Investment · Acquired DASAN TPS · Supplied FTTH GPON to SKB in Korea · No.1 VoIP provider of Samsung networks · Started supplying Mobile Backhaul solution(GPON) to Softbank in Japan (2011) · Started supplying 4G LTE Access solution to LG U+ in Korea · Acquired HANDYSOFT Inc. (merged into DASAN SMC) · Cancellation of shares : 1,000,000 shares · Headquarter relocated (DASAN Tower) Globalization & Diversification ( 2012 ~ Present) (2012) · Acquired DMC Inc. (previously DongMyeong Trading Company) (2013) · Started supplying GPON solution to Chunghwa Telecom · Acquired DTS Inc. (previously DongYang TS) · Launched SKB Smart Box (B-Box) (2014) · Started supplying FTTH solution to Viettel in Vietnam (2015) · Networks Biz Unit(DNS) Captive Spin-off · Acquired Solueta Inc. · Established Taiwan Branch ‘D-Mobile’ (2016) · DMC changed from a subsidiary to a related company. · Acquired a Nasdaq listed company, Zhone Technologies in Sep. 9 · Started supplying network equipment to Gov. in France and India · Started supplying 10G EPON to KDDI in JAPAN (2017) · Globally launched the ‘Alpha-one’, a luxury smartphone of Tonino Lamborghini brand. · DTS changed from a subsidiary to a related company.

5 2. Shareholders Portion of institutional investor (2013A 32.0% → 2014A 24.1% → 2015A 14.0% → 2016A 14.1% → 2017A 11.5%) ■ Shareholders Composition in the last Five Years ■ Major Shareholder (March 31, 2018) Shareholder No. of Stock Ratio DASAN Invest, Inc. (The largest shareholder) 6,929,635 24.7% Mr. MinWoo Nam (CEO) 885,185 3.2% Treasury Shares 2,301,988 8.2% ShinYoung Asset Management 2,109,461 7.5% Etc. 15,795,212 56.4% Total 28,021,481 100.0% 2016 2013 2014 2015 4.4% 10.0% 22.0% 37.5% 26.1% 21.5% 2.6% 45.4% 11.5% 12.1% 1.9% 51.3% 25.2% 10.6% 11.0% 3.1% 50.1% Largest Treasury Institutional Individual 9.1% 1.5% 52.2% 27.2% 2017 Foreigner 32.0% 24.1% 14.0% 14.1% ■ Current Status of Bonds KRW Amount Balance Price C. Stocks Period Rate 4CB 33Bn 3.2Bn 5,680 573,767 1%, 4% 5CB 28Bn 9.9Bn 5,788 1,724,257 0%, 1% 6CB 10Bn 6,760 1,479,289 7EB 0.%, 0% Total 81Bn 33.2Bn - 5,256,602

6 Subsidiary and Related party Subsidiary and Related party
3. Organization DASAN Invest DASAN Invest Minwoo, Nam MinWoo Nam 100.0% Chairman Holdings SW DASAN Networks Kosdaq 28.6% Consolidated Subsidiary and Related party Subsidiary and Related party Broadband Access Mobile Network (5G, LTE) Network DZSI DNS KOR/USA DASAN JAP, VIET, INDIA D-Mobile Manufacturing SOLUETA DMC DTS Bio Matrix SW∙IoT HANDY SOFT HANDY CAR DASAN KYS GH SOFT Automotive (Electric) EMC Solution Heat Exchanger IoT Service platform Connected Car IT Service 57.9% 24.8% 17.6% Nasdaq Kosdaq Kosdaq 100.0% 100.0% 88.9% 50.2% 50.0% 100.0% 66.7% 59.6%

7 4. Product and Solution Back-bone Customer Access Edge Core Carrier
Enterprise Wireless LAN ONT 1:64 GPON OLT GPON 10G OLT (MSAN) EPON OLT Back-bone ONT 1:32 EPON ONT Wireless AP Office Access Switch School Wireless AP Edge Switch Police Station Access Switch Mobile Core AC RRH BTS Ethernet BTS Wireless Access Mobile Backhaul Metro Mobile Backhaul IP-PTT ※ Above image is for illustration purpose only, actual configuration may differ.

8 5. Business Composition 2016A 2017A 2017A 2,098억원 322.2 KRW bn
Revenue by geography Revenue by Products 23% 25% 30% 37% 2016A 2,098억원 네트워크부문 2017A 322.2 KRW bn Network business 2017A 322.2 KRW bn Network business 50% 10% 75% 40% 10%

9 6.1 Overseas Business Status
Main Progress Customers Boost in worldwide construction of High-speed Internet and mobile network, because of boom up the media contents and 5G. Win the new projects from the Indian and French governments in 2017. Participation in global telecommunication carriers business in USA and Japan, etc. Merger with Nasdaq-listed communication networks equipment company, Zhone technologies in USA (Sep. 09, 2016) Expanding global revenue since 2017 Locations Sales R&D Sales R&D India China Sales R&D South Korea Sales Sales Japan France U.S. Sales Sales Taiwan Vietnam Sales R&D

10 Average Connection Speed
6.2 Worldwide Average Internet Speed Revenue of global network equipment is growing steadily (increasing in demand of global media contents) Average Connection Speed Norway : 23.5 Sweden : 22.5 Finland : 20.5 South Korea : 28.6 Japan : 20.2 Taiwan : 16.9 Thailand : 15.9 Vietnam : 9.5 China : 7.6 America : 18.7 Canada : 16.2 Mexico : 7.5 France : 10.8 India : 6.5 Kenya : 12.2 M M M Mbps (source by Akamai, 1Q 2018)

11 DASAN Network Solutions
7.1 Main Subsidiaries – Network Business ■ Network business Organization DASAN Networks DASAN Network Solutions (US) DASAN Zhone Solutions 57.9% 100.0% The Network solution provider for Carrier and Enterprise markets in Korea. The global leader in network access solutions for service provider and enterprise network (NASDAQ : DZSI) Subsidiary of DASAN Zhone Solutions, Global network solution company Which located in North America. (KOR) Subsidiary of DASAN Networks Solutions(US), Network equipment R&D and domestic biz DASAN Zhone Solutions, Inc. ■ DASAN Zhone Solutions, Inc. Stock Chart Founded in Jun Listed on Nasdaq in Nov CEO : Yung Kim Around 250 employees Network equipment development and production Located in Oakland, CA, U.S. ※ The acquisition of Zhone technologies was completed on Sept 9, 2016 (NASDAQ: DZSI) Stock Price .$11.44 Market Cap $188 Million (Mar. 29, 2018)

12 Global FTTx Revenue by Vendor
7.2 Global Market Share in Network Business Global FTTx Revenue by Vendor DASAN Networks, Zhone DASAN Networks + Zhone Source by Infonetics Research, 2Q 2015 Huawei Alcatel-Lucent ZTE Calix Adtran Fiberhome Mitsubishi Zhone ECI Zyxel Fujitsu DASAN Networks Huawei Alcatel-Lucent ZTE Calix Adtran Fiberhome DASAN Zhone Solutions MASKATEL MTS OMNILEC GRM PRIMUS TELUS GOLDEN WEST SRT CONSOLIDATED INTERBEL BIRCH NORTH STATE CURATEL AXTEL PRT YADTEL GTD GVT COPACO TELEFONICA ETISALAT SAUDI TELECOM CAT TOT VENTELO TELEKOM SRBIJA MULTIMEDIA LNTENO UPDATA.NET T MOBILE OGERO TELECOM MOBILY TELECOM EGYPT PCCW ELMAT KT SKB LGU+ NTT KDDI SoftBank VIETTEL BSNL CHT FURUKAWA OPTICOMM DASAN Area Zhone Area

13 7.3 Main Subsidiaries – besides Network Business
Business structure upstream by subsidiaries cooperation (Car network, Automotive application component and IoT, etc.) (Unit: KRW bn) Kosdaq Solueta [24.8%] 2017A (For the fiscal year ended December 31, 2017) Sales 41.8 ㅣ OP 3.1 ㅣ NP 0.7 Kosdaq Handy Soft [17.6%] 2017A (For the fiscal year ended December 31, 2017) Sales 40.1 ㅣ OP -1.3 ㅣ NP -4.6 IoT Platform Connected Car Service Collaborative software (Groupware, etc.) IoT platform Conductivity material for electromagnetic shield Subsidiary of Solueta DMC [100.0%] 2017A (For the fiscal year ended December 31, 2017) Sales ㅣ OP 0.8 ㅣ NP -4 Subsidiary of Solueta DTS [50.2%] 2016A (For the fiscal year Ended March 31, 2017) Sales 33.9 ㅣ OP 0.07 ㅣ NP -1.4 ACC (Air Cooled Vacuum Condenser), Heat exchangers for industrial Automotive rubber component and network, Camera system for vehicle

14 8. Business Performance and Financial Results (Consolidated)
■ Sales ■ Asset / Cash (Unit: KRW bn) (Unit: KRW bn) 371.3 300.0 307.1 355.5 345.6 Total asset CAGR 23.3% 300.0 222.8 259.0 200.0 200.0 180.6 164.0 100.0 100.0 Cash equivalents 52.8 34.0 47.0 17.0 2014 2015 2016 2017 2014 2015 2016 2017 ■ Operating Profit ■ Liability / Short-term Liabilities (Unit: KRW bn) (Unit: KRW bn) 10.0 223.6 Total liabilities 200.0 218.6 182.1 2.4 0.03 125.3 (4.1) (13.3) 100.0 Short-term liabilities 88.3 69.1 -10.0 66.4 63.3 2014 2015 2016 2017 2014 2015 2016 2017

15 9. DASAN Vision Network Solutions Software Auto Parts Engineering EMC
Creating synergy across primary business units (Network, Software, Automobile, Engineering, etc.) Developing new business model for continuous growth (IoT, Electric Vehicle, etc.) Network Solutions Software l IoT Network solutions Software Connected Car Network solutions Auto Parts Engineering EMC Automotive parts and network solutions for automobiles Heat Exchanger EMC Materials


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