©2007 d-link india ltd. all rights reserved. d-link india ltd. investor presentation

©2007 D-Link India Ltd. All rights reserved. www.dlink.co.in

D-Link India Ltd.

Investor presentation


The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context has been taken care off in the presentation and neither we undertake any obligation as to the regular updating of the information as a result of new information, future events or otherwise. We will accept no liability whatsoever for any loss arising directly or indirectly from the use of, reliance of any information contained in this presentation or for any omission of the information. The information shall not be distributed or used by any person or entity in any jurisdiction or countries were such distribution or use would be contrary to the applicable laws or Regulations. It is advised that prior to acting upon this presentation independent consultation / advise may be obtained and necessary due diligence, investigation etc may be done at your end. You may also contact us directly for any questions or clarifications at our end.

This presentation contain certain statements of future expectations and other forward-looking statements, including those relating to our general business plans and strategy, our future financial condition and growth prospects, and future developments in our industry and our competitive and regulatory environment. In addition to statements which are forward looking by reason of context, the words ‘may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue’ and similar expressions identify forward looking statements.

Actual results, performances or events may differ materially from these forward-looking statements including the plans, objectives, expectations, estimates and intentions expressed in forward looking statements due to a number of factors, including without limitation future changes or developments in our business, our competitive environment, networking technology and application, and political, economic, legal and social conditions in India. It is cautioned that the foregoing list is not exhaustive. This presentation is not being used in connection with any invitation of an offer or an offer of securities and should not be used as a basis for any investment decision.

Investor Relations :- http://www.dlink.co.in

For any queries, write to: [email protected]

Disclaimer

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mailto:[email protected]


Led by the Boom in the Economy, the Indian Hardware / Networking Sector is also Witnessing Strong Growth

IT Spending Now A Strategic Decision By

Customers

Domestic IT spending is rapidly increasing in recent years, fuelled by unprecedented growth in IT, ITeS, telecom, banking and insurance verticals.

NASSCOM estimates that the domestic spend on IT shall reach US $ 12.5 billion in 2006 from $7.5 billion spent last fiscal.

As per Gartner, the Enterprise spending on hardware in India is expected to grow by 21.1 % to $3.34 billion.

The Indian IT sector alone, expects to require hardware worth USD77bn by 2010 as per an AsiaTimes article.

The Electronics Manufacturing Services market is expected to be around US $4.6 billion by 2010.

Immense opportunities for contract manufacturing as domestic industry becomes more competitive.

PC & Internet penetrations witnessing exponential growth.

Increased PC and Internet Users

1.6 2.12.8 2.8

5.1

6.7

8.5

10.7

13.5

1.11.8

4.4

6.7

3.7

0.2 0.4 0.7

-

2

4

6

8

10

12

14

1997 1998 1999 2000 2001 2002 2003 2004 2005

Mill

ion

s

PC Population Internet Subscribers

Source: DoT, NASSCOM & Telescope Survey, ISPAI

As per a MAIT – E&Y study, Indian Hardware and Networking Industry has the potential to

reach USD 62 bn by 2010

Booming Indian Networking Sector


Broadband Revolution

Broadband services have been introduced and standard computers now come equipped with broadband modems

Broadband market estimated at over Rs20bn

Subscriber base expected to increase from 0.18mn in 2005 to 18mn in 2010

Advent of broadband connectivity to drive demand in the inter-networking segment

Regulatory Regime • Increased Govt Focus

– Government committed to increasing the internet penetration by ushering in a broadband revolution

– 30% value– Government encouraging

equipment industry to set up base in India

23% CAGR

Booming Indian Networking Sector

D-Link India Ltd


Corporate Profile

• Founded in 1993 as JV between Mr. K. R. Naik and D-Link Corporation.• Publicly listed in 2001 at Major Stock Exchanges in India (BSE/NSE)• Present Shareholding Promoters 62% public 38%• Paid-in Capital: Rs.60 Mn (US$ 1.33 Mn)• Current Market Cap: around US$ 50 Mn• Very first networking players in the country – Very few who have

successfully survived• Well integrated Business Model Starting from Manufacturing to

Servicing.• Employee strength


Integrated “Business Model”

• Strong Service & Support record• 17 Branch offices providing active post sales tech support• 16 product service centres• Tech support call centre providing voice & email based tech support domestically and globally

• Well known brands – D-Link, Gigabyte, Foundry• Dominant Market presence• Broad product spectrum

Software and R&D

Manufacturing Marketing Distribution Service

• 4 state of the art mfg plants meeting Intl stds• 70% of local demand manufactured locally• Versatility of SMT lines allows manufacture of wide range of IT products

• Strong acclaimed Channel presence• Unique Distribution set-up• Wide-spread reach• Unchanged distribution set-up

• Designing & Developing own IPR products • Specialized in Embedded Systems with technical focus on VOIP and Networking • Servicing 3rd party requirements


Product-Reach

Networking Products: NIC’s , Switches Hubs, Repeaters, Transceivers, Converters, Print Servers, NAS, Switches: catering to all markets including SOHO, SMB and enterprise.

Internetworking products: Modems, routers, firewall, internet server, VOIP, Broad band products.

Structured Cable: comprising of entire range of Fiber and Copper passive products

VoIP - IP Telephones, Station Gateways, Trunk Gateways, IPPBX,Gatekeepers etc.

Broadband Products: ISDN/Cable/DSL Routers, ADSL Modem, Video conferencing, Wireless Routers

“Complete basket of products for all networking and communication needs”


“Services” driver of Sales

“With growth in higher middle class services will be the major driver of sale in this industry.”

Service Centers– D-link’s has nationwide Service Centres– Our Strength: All services upto level3 repairs can be carried out in the

service centres

Call Center– Provides Level 1 & 2 support for D-link products.


Dominant Market Position

DIAL UP MODEMS RANKING MARKET SHARE

D-LINK 1 60%

DAX 2 14%

MROTEK 3 13%

MODEMS

ATRIE 1 28%

MROTEK 2 27%

D-LINK 3 25%

MOTHER BOARD

INTEL 1 27%

GIGABYTE 2 26%

ASUS 3 15%

SWITCHES RANKING MARKET SHARE

CISCO 1 71%

D-LINK 2 8%

NORTEL 3 6%

WLAN

CISCO + LINKSYS 1 43%

D-LINK 2 25%

NETGEAR 3 9%

STRUCTURED CABLING

TYCO 1 28%

SYSTIMAX 2 27%

D-LINK 3 14%


FINANCIALS

FY06 Highlights

Conceptualization & setup of strong Enterprise Business Unit (EBU) team to explore huge the Enterprise market

– Leverage the end to end delivery model of d-link

– Leverage the already robust channel segment to cater to Enterprise segment.

R&D facility continued development / IP’s for own products.

– IPPBX developed by R&D has been well received in US.

Services Centers

– Service centers were increased from 5 to 16 pan India.

Company started catering to D-Link Corporation’s other Overseas Business Units (OBU’s).

– Commenced export of its own products to OBU’s.

Board got strengthened by induction of two new professional independent directors.

– Increased focus on corporate governance and value creation

A year of Strategic Alignment


Rs in Million

Particulars FY 06 FY 05 Growth

Turnover 3014.77 2947.19 2.29%

PBDIT 346.90 415.96 -16.60%

PBT 283.07 358.67 -21.08%

PBT & Other Income 224.42 306.00 -26.66%

PAT 232.06 286.24 -18.93%

EPS 7.73 9.54

Total Dividend 100% 160%

Financials


Growth over 10 years

155.7 172.5

416.3

816.2

1645.91743.2

2051.8

2396.9

2947.2 3014.8

2.8 3.1 32 68.7187.9 182.1 221.3

313.8 286.2 232.1

0

500

1000

1500

2000

2500

3000

3500

FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06

Series2 Series1


Expanding Businesses: Milestones

1993: Networking product line1998: Internetworking range of products1999: Structured Cabling (fiber & copper) range

(% of Total Business) D-Link Corporation Products: 30% D-Link India Developed Products: 30%

Gigabyte Products: 30%

2000: Broadband Application products2002: Motherboards - Gigabyte2004: High end networking solutions with Foundry Networks (Co-brand)

Expanding product portfolio


Strategic Partners & Alliances

• D-link Corporation: D-link India OBU of d-link corporation

• Foundry Network Inc.: Co-branding in High End Networking

• Gigabyte Technologies, Taiwan : PC components and peripherals.


Recent management initiatives to control costs and improve profitability

- Manufacturing and R&D to be made profit centres

- To generate revenues through EMS manufacturing

Po

tentia

l fo

r Valu

e A

ccretion

Cost RationalisationGrowth Initiatives

Well positioned to establish dominant position in the explosive market for broadband, Wireless and VoIP products

Management initiatives such as induction of professionals and setup of separate focused Enterprise Team expected to bear fruits in the near term

Enterprise Segment - Currently dominated by Cisco; estimated at Rs8bn, presenting revenue opportunity of at least Rs700 – 800 mn

Strong and loyal distribution network a key

strength for the company

Strong service network built over the last year

to act as an entry barrier

Established presence in inter-networking

space that is witnessing explosive growth

Generic brand in the area of modems

Competitive AdvantagesStrong Fundamentals

Stro

ng

F

un

dam

entals

Among Top 2 Players Across Product

Categories

Established brand name

Dominance in SOHO market

Induction of Professional Management

Integrated across the chain of activities

Commitment to increase shareholder value


Growth Drivers of D-link

– Product range: Complete range of products– Sales and marketing: strong experience in creating

brands, strong distribution channel– Service: one of the few players having inhouse

service – Manpower: Committed and loyal workforce– Technology and Quality: In-house R &D facility,

Focussed on developing our own IP’s and products.

Commitment to increase shareholder value


Thank You!


D-link

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