1
Eltek
Powering the world’s telecom infrastructure
Introduction
Morten F. Angelil - CEO
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Agenda
Introduction Morten F. AngelilProducts & Technology Arne SteinbakkOutsourcing Vidar SelvigFinancials Jørgen LarsenMarket Outlook Morten F. AngelilStock Information Morten F. Angelil
Mission
Our mission is to secure global communication by providing critical power solutions for telecom infrastructure
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Reliable Telephone Service
SwitchingSystem
DC PowerSystem
Transm.System
Utility AC
To/FromPublic Network
Batteries
Power systems for wired and wireless telecom networks
Rectifiers and monitoring unitsStandard systems and Custom design Installation and service
Customers are telecom operators and builders of telecom infrastructure
4
History
1968 PCP established
1971 Eltek established
1983 Eltek UK established as the first step in internationalization
1994-00 Eltek established in Hong Kong/China, Germany, Poland, India, Singapore, France, Sweden and Australia
1998 80% of PCP acquired by CC Industries
1998 Eltek listing on Oslo Stock Exchange
1999 Sale of Fire & Safety business (completed 2000)
2000 Merger Eltek/PCP
2000 Included in OBX-index OSE (25 most traded shares)
Revenue continuing operations
544
774 867
1118
1894
0
500
1000
1500
2000
1996 1997 1998 1999 2000
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Company chart
ELTEK ASA
ELTEK ENERGY AS 100 %
ELTEK (UK) LTD. 100 %
ELTEK ENERGY FRANCE S.A. 100 %
S.F.E.E. S.A, France 51 %
ELTEK ENERGY LTD., Hong Kong 61 %
ELTEK POLSKA Sp.z.oo 51 %
ELTEK ENERGY PTE. LTD., Singapore 95 %
ELTEK SGS PVT. LTD, India 51 %
GERTEK STROMV., GmbH, Germany 67 %
UNITECH AS, Norway 100 %
COMPOWER AS, Norway 34 %
MICROPOWER FORV. AB, Sweden 34 %
ELTEK PACIFIC LTD, Australia 51 %
ELTEK ENERGY AB, Sweden 100 %
POWER CONVERSION PRODUCTS, LLC, USA 100 %
PCP INTERNATIONAL DE, Mexico 100 %
BEIJING PCP CO. LTD., China 50 %
ELTEK ENERGY TECHNOLOGY LTD100 %
ELTEK ENERGY CVI LTD 100 %
Global Location
Head Office
Sales & Service
Assembly -Test
Manufacturing - Assembly -Test
Outsourcing Partner
Distributors
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EuropeC. Howe
Asia/Pac.L. Jervan
ChinaF. Kong
AmericasC. Seyer
TechnologyR. Hagen
Sales / Marketing J. Rønsen
CEOM. F. Angelil
CFOJ. Larsen
COOV. Selvig
SupplyG. Henriksen
Organisation
Products
Arne Steinbakk – R&D Manager
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Presentation outline
Power conversion basicsProducts and applicationsR&DTechnology trends
Power conversion basics
Voltage VCurrent APower W
Electrical power is available as alternating (ac) voltage, typically 230V, 50Hz
Electronics operate from low dc voltages, typically 5V or lower for digital circuits
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Power conversion basics
Telecom equipment require power back-up in case of mains failure (batteries, diesel generator)High reliability (redundant systems)48Vdc output with multiple load distribution to feed downstream converters Flexible system configurationHigh efficiency
Power conversion basics
Switch
RectifierAC/DC
ACLoad
DCLoad
DCLoadBrick
Brick
48VDC to110/120VAC
InverterGenSet
Batteries
Circuit Breakers
48VDC230 VAC
RectifierAC/DC
RectifierAC/DC
DC UPS SYSTEM
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Power Conversion Basics
Switch
230 VAC UPSAC/DC
ConversionAC/DC
AC/DC
110/208 VACTransformer
GenSet
Batteries (High Voltage)
AC Distr.
UPSDC/AC Distribution
Transformer
DCLoad
DCLoad
AC UPS System
Bypass
On Board
ACLoad
Brick
Brick
Front-End
Power Conversion Basics
AC to AC UPS systems require more conversion stages from input to load
Result: lower efficiency, higher cost
Distribution of low voltage DC is safer and eases installation and service
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Products and applications
Convergence of IT and telephony
IT or computer equipment traditionally require AC UPSTelephony equipment require DC UPSComputer and telecommunication equipment are becoming one!New IP data/voice equipment is being powered from 48Vdc UPS
�Extremely high power requirements
Products and applications
Distribution
ControlEnd Equipment
Batteries
AC in
DC out
Rectifiers
DC/DC
Source: Skyline Marketing
TELECOM POWER SYSTEMS
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Products and applications
Distribution
Control Unit
Rectifiers
Products and applications
Small systems: Less than 100A (5kW)
Medium systems: Between 100 and 1000A (5kW – 50kW)
Large systems: Greater than 1000A (50kW)
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Products and applications
MPSFan-cooled
SMPS200Convection-cooled
Applications small systemsCustomer premises, POP’s, DLC cabinets, Wireless, fiber repeaters
Products and applications
Applications medium systemsWireless base stations, distributed power systems, large POP’s, fiber repeaters, small switches
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Products and applications
Large GSeries® system
Large central office switches, internet HUB’s, Web hosting, co-location, optical switches.
Extendedmarket cover in USA
Products and applications
Large Aeon System
Large central office switches, internett HUB´s, Web hosting, co-location, optical switches
New system replaces old system at substantially lower cost
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Products and applications
TCP/IP Gateway™Most technologically advanced monitorDC system communication via LonworksMost technologically advanced monitorDC system communication via LonworksActs like a small web server: Point your browser to IP address and you are connected to the DC PlantIP connectivity through Telnet, SNMP and TCP/IP
Output Amperes
1000 >100 > 10000 >
Functional
MPSU 4000 MPSU 6000
TWPP 1500, 3000
PRS 700- 10kw
PRS 700- 21 kW
TWPP 250kW
AEON 4000 500kW
G-series 500kW
MEDIUM LARGESMALL
Flexible Futuristic
MPSU 200
MPS
Products and applications
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R & D
Mission statement
Our focus is to provide the most cost competitive state-of-the-art power solutions –on time
R & D
Cost competitive productsTechnology and outsourcing in one departmentOutsourcing and production ramp-up becomes an integral part of the development projectContinuous product maintenance and cost reduction activities on volume products
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R & D
State-of-the-art power solutionsHigh focus on research and new technologyCollaboration with internationally acclaimed universities on strategic research programs Synergies from R&D centres within the Group
R & D
State-of-the-art productSMPS 4000 Aeon
Output power 4 kW (48V/75A)Input voltage range 100 – 300 VacProtected against high/low mains, high temperature, lightning transients…Complete digital interface to the system using Can bus Power Density 7.2w/cubic inch or 0.44w/cubic cmOne of the highest power density, most cost effective units on the market
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R & D
On-Time SolutionsGoal is to reduce development time to 12 months or less for new productsReduce risk before project startDefine system requirements before designing the building blocksFocus on project management
R & D
Research, Development and Engineering:Capabilities
R&D departments in England, USA and Norway, appr. 60 peopleLocal system engineering in all regions, appr. 30 peopleCore products are developed in R&D, system adaptions to fit local requirements and approvals are done locally
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Technology trends
Extremely high power requirements for IP telephony/Internet Integration of telecom equipment and DCpower in small sitesRemote monitoring (Internet, SNMP)Distributed intelligence
Technology trends
More compact power solutions. Higher density, higher efficiency”Bricks” on each printed circuit board due to low operating voltages. End converter must be close to the loadDesigns streamlined for stable, high volume production
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Outsourcing
Vidar Selvig - COO
Outsourcing
High volume core products from Eltek Energy already outsourcedOutsourcing TWPP from PCP in process –effect from April 2001Outsourcing of high volume system assembly in process –prepare for large 3G volumesGlobal logistic and warehousing outsourced from Q1 2001IT will be outsourced (partly ASP) in Q2 2001Outsourcing partners in Europe, Asia and Americas
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Outsourcing effects
Access to high capacityImproved delivery performanceImproved qualitySignificantly lower product costFocus changed to other critical business processes
Financials
Jørgen Larsen - CFO
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Financial development 1996-2000Continuing operations
0
50
100
150
200
250
300
1996 1997 1998 1999 20000
500
1000
1500
2000
2500
3000
EBITDA Revenue
Key Figures
2000 1999 Growth rate 2000 1999 Growth rate
Revenue 1 894,0 1 117,5 69 % 538,3 370,1 45 %EBITDA 252,1 108,6 132 % 73,1 46,6 57 %EBIT 189,1 55,0 244 % 54,3 31,8 71 %Profit before tax, cont. operations 205,6 56,2 266 % 60,2 32,7 84 %Net profit, cont. operations 135,4 37,8 258 % 41,6 19,5 113 %Disc.oper./Equity part. 161,2 153,1 5 % -33,6 135,7
Net profit 296,6 190,9 55 % 8,0 155,2
EPS 5,36 1,48 262 % 1,72 0,81 112 %Cash EPS 7,14 3,06 133 % 2,21 1,20 84 %
Whole year 4th quarter
EPS figures are calculated excluding discontinued operations and equity participation compensation.Integration costs of NOK 7 million in 4th quarter 2000.
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Revenue and EBITDA
29,219,0 17,4
8,7 12,0 15,0
35,046,6
39,8
70,7 68,4 73,1
0
200
400
600
800
q1 98 q2 98 q3 98 q4 98 q1 99 q2 99 q3 99 q4 99 q1 00 q2 00 q3 00 q4 000
20
40
60
80
EBITDA Revenue
Including employer’s tax on stock optionsAmounts in MNOK
Development Gross Margin 2000
40,5 % 41,9 %
35,9 %38,9 %
0 %
10 %
20 %
30 %
40 %
50 %
Q1/00 Q2/00 Q3/00 Q4/00
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Africa1 % Asia/Pacific
10 %
Europe37 %
Americas46 %
705435
0300600900
2000 1999
Global sale per 4th quarter
Amounts in Mill NOK
China6 %
22 230
300600900
2000 1999
864
490
0300600900
2000 1999
19279
0300600900
2000 1999
111 910
300600900
2000 1999
GR: -4%
GR: 76%
GR: 143%
GR: 22%
GR: 62%
Revenue and Order per 4th quarter
498
1 894
2 162
230
1 118 1 206
0
400
800
1200
1600
2000
Revenue Order intake Order backlog
2000 1999
Amounts in MNOK
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Order Intake per quarter
201 191237
179243 274
360 329
422
640
533 567
0
100
200
300
400
500
600
700
1.q.98 2.q.98 3.q.98 4.q.98 1.q.99 2.q.99 3.q.99 4.q.99 1.q.00 2.q.00 3.q.00 4.q.00
Amounts in MNOK
Order Backlog per quarter
164 133 146 141 168210
271230
302
480 469 498
0
100
200
300
400
500
600
1.q.98 2.q.98 3.q.98 4.q.98 1.q.99 2.q.99 3.q.99 4.q.99 1.q.00 2.q.00 3.q.00 4.q.00
Amounts in MNOK
25
75 %
15 %10 %
Power Systems Batteries/other Installation/Service
Sales per product area 2000
9 %
34 %
42 %
2 %13 %
Small recitfiers SMPS 1000 TWPP SMPS 4000 SMPS 5000
Power Systems
Sales per customer group 2000
32 %
20 %
48 %
Wireline-Backbone Wireline-Access Wireless
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15 largest customers
NextelLevel 3Switch & DataWorldcomPRTEM AllegianceMaxis CommunicationDolphinN G BaileyKPN-QwestNortelMotorolaDongguan City TelecomAlcatelTelenor
Share of total revenue: 55%
Balance Sheet
Amounts in MNOKGoodwillOther fixed assetsTotal fixed assetsInventoriesShort term receivablesCash in hand, bank depositsTotal current assetsTotal assets
Share capitalOther equityMinority interestsTotal equityLong-term liabilitiesBank overdraftShort term liabilitiesTotal current liabilitiesTotal equity and liabilities
Equity ratio
31.12.00541,6125,2666,7258,7504,0128,3891,1
1.577,8
24,3944,624,3
993,1123,513,3
427,9441,1
1.557,8
63,8%
31.12.99514,7154,3669,0195,5282,6124,2602,3
1.271,3
14,0880,814,5
909,371,20,7
290,1290,8
1.271,3
71,5%
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Employees per 2000.12.31
96
413
55
230
China Europe Asia/Pacific America
Total number of employees; 794
Market Outlook
Morten F. Angelil - CEO
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Europe
A leading player in EuropeLocations in Norway, UK,Germany, France, Sweden and Poland
Sales in more than 25 countries
Turnover NOK 705 millionCustomers/contracts
Level 3DolphinNortelTelenorEricssonSiemensKPN QwestNG BaileyAlcatelFibreway
FacilitiesHead office, R&D, System Assembly Service, Installation
Market outlook Europe
UMTS licences awarded in 80% of EuropeNew infrastructure (approx 5000 base stations perlicence per country)Fierce competition Time to market/deliveries vital
Broadband networks build-upGreat demand for new co-location facilities
UK still European HubMainland Europe currently developing
Deregulation of network accessOpportunities for new players
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Asia/Pacific
Significant player in Asia/Pacific
Market leader in Singapore, big in Australia and the regionTurnover NOK 192 millionCustomers/contracts
Nortel, Silcar, Singapore Telecom, Phiana, Nokia, Maxis, Motorola
FacilitiesEngineering and system design, System assembly, installation, service/maint.
LocationsSingapore SydneyDehli
Market Outlook Asia/Pacific
Strong demand for 2/2,5G wireless networksInternet development requires infrastructure
Large Internet sitesTele hotelsCo-location facilities
Broadband networks/Network accessTrend from US and Europe starting in Asia
Promising future for 3G wireless networks
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China
Well established in China
Consolidated turnover NOK 111 million
Turnover based on Eltek/PCP products NOK 300 million
Customers/contractsGuangDong Province Mobile, Dongguan City TelecomGuangZhou City TelecomYuNan Province MobilePRTEMChina Unicom
FacilitiesManufacturing,Engineering and system design,
System assembly, installation, service/maint.
LocationsDonguan GuangZhouBeijingShenYanWuHanHongKong
Market Outlook China
Huge & promising market with world’s highest growth rate
Telephone subscribers >200M in Year 2000Mobile subscribers 70M in Year 2000, 200M
in Year 2003 Internet subscribers 20M in Year 2000 with 150-200% annual growth rate
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Americas
A strong position in the world’s largest market
Turnover NOK 864 millionCustomers/contracts
Worldcom NextelMotorolaAllegianceSwitch & DataAT&T
FacilitiesManufacturing, Engineering and system design, System assembly, installation, service/maint.
LocationsCrystal Lake8 sales offices across the US
Mexico City
Market Outlook US
Public network cap ex still strong but growing slower than past two yearsDC power spending rate ahead of overall capexServers/IT industry going away from AC to DCHigh growth segments
Optical networkingBroadband accessWirelessCo-Location and Web hosting
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Market Outlook CALA
Strong demand for 2/2,5G wireless networksLicenses still being awardedGreat demand for fixed wireless
Underdeveloped fiber network infrastructureBackboneWeb hostingAccess and competitive services
Promising (long term) market for 3G
Network Expansion Drivers
Growing traffic (voice/data) volumesNeed for speedNew Internet services - wireline/wirelessFalling information costs
Source: Skyline Marketing
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The Broadband Imperative
Deregulation unleashes competitive forcesCarriers are expanding service offeringsCustomers with powerful PCs want fast access Network bandwidth must expand quickly
➨ Significant implications for power
Source: Skyline Marketing
Internet Impact
Explosion of applications - information, entertainment, e-commerceLow-cost, high-value mediaHigh-speed accessFacilitates multimedia - voice, data, videoTransport over backbone telephone network
Source: Skyline Marketing
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Tomorrow’s All Optical Network
Intercity SuperRing
Local City Ring
Loop Ring
Multimedia Terminals
IPServer
Multimedia Terminals
OpticalSwitches Optical
Switches
IPServer
OpticalCross-connect
DC Power System
Source: Skyline Marketing
Global Wireless Subscribers
0
500
1 000
1 500
2 000
2 500
3 000
1995 2000 2005 2010 2015
Subs
crib
ers
(mill
ions
)
EU 15 N. America Asia Pacific CALA ROW
Source: ITU, Skyline Marketing
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Source: Darnell; Skyline, est. Feb. 01
Global Telecom Power Market
CAGR 24%
CALA
Asia-Pacific
EMEA
N. America
China
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
$12,000
$13,000
2000 2001 2002 2003 2004 2005
Power Equipment-only
36%
17%
21%
30%
24%
CAGRUSD
Global Market Shares 2000DC Power Systems for telecom power
2 %
2 %
2 %
3 %
4 %
14 %
16 %
48 %
9 %
PowerOneAscomInvensysPeco IIEltekMarconiEmersonTycoOthers
Source: Skyline Marketing
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Recent development
EuropeBuild out of
Web hostingTele hotelsCo-locations
Still 2G wireless build out3G wireless start in 2nd quarter 2001
Recent development
USAExtended market cover
2000: Medium systems – TWPP2001: Small systems – Eltek products (large volume)
Large systems – new product; GSeries®New location in Dallas from 2nd quarter
Increased competitivenessOutsourcing TWPP to Mexico – significant cost reduction
Continued strong wireless activityAll major service providers confirm large capex programmes
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Recent development
Asia/Pacific and ChinaHigh 2G wireless activityInitial 3G wireless activityWeb hosting and co-location build upIncreasing activity on Frame Agreement in AustraliaIncreased distribution network in ChinaCo-ordination and consolidation of Eltek’s and PCP’s activities in China
Expansion
Leverage UMTS opportunities in Europe
Strengthen sales and distribution in the USExpand into South America
Capitalise on network inAsia/Pacific
Expand salesnetwork in China
Continue growth and global expansionOrganic growth AcquisitionsMergers
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Stock Information
Morten F. Angelil - CEO
Stock performance
Eltek Stock vs OSE Total Index and IT-index
as per 26.03.2001
0
100
200
300
400
500
08.07
.98
08.09
.98
08.11
.98
08.01
.99
08.03
.99
08.05
.99
08.07
.99
08.09
.99
08.11
.99
08.01
.00
08.03
.00
08.05
.00
08.07
.00
08.09
.00
08.11
.00
08.01
.01
08.03
.01
Eltek ASA Total index IT index
NOK
39
Largest shareholders per 28 February 2001
Shareholders registered in
VPS as at 06.03.01
Shareholder Number of shares % of totalCC Industries 7 480 828 30,8 %Eltek Holding AS/A.F. and W. Angelil 6 704 303 27,6 %Edward Weil Jr 982 108 4,0 %DnB Investor (sev. accounts) 788 680 3,3 %Gjensidige Nor Kapitalforvaltning 464 680 1,9 %Tine Pensjonskasse 444 000 1,8 %Storebrand Livsforsikring 361 700 1,5 %Chris Seyer III 343 099 1,4 %SND Invest AS 320 000 1,3 %Stephen Griffitts 280 613 1,2 %Vital Forsikring (sev. accounts) 222 900 0,9 %Aksjefondet Gambak 200 000 0,8 %Avanse Forvaltning (sev. accounts) 193 500 0,8 %DnB Markets 167 560 0,7 %Storebrand Spar (sev. accounts) 166 000 0,7 %Vesta Forsikring (sev. accounts) 133 760 0,6 %Terra Forvaltning (sev. accounts) 126 000 0,5 %Tony Cosentino 110 000 0,5 %Jørgen Larsen 105 249 0,4 %K-G Invest 105 000 0,4 %
Number of shareholders
761 624
2 070
2 871
0
500
1000
1500
2000
2500
3000
year end 1998 year end 1999 year end 2000 28.02.01