Netas company overview

5/22/2018 Netas company overview

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Company Overview

November 2013

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Executive Summary

Netaseeks to create the premier ICT services company in Turkey with export channels into Asia, Africa & theMiddle East

Netatoday is the combination of two businesses: Nortel Netaand Probil Nortel Netawas a carrier-grade Systems Integration (SI) company with an in-house R&D department and the ability to

complete large, complex projects in the telecom and public safety / defense segments Probil was an enterprise-grade SI business with attractive customer relationships in key verticals (telecom, finance, general

industry)

Netahas strengths and opportunities neither Nortel Netanor Probil had independently: Unique capability to manage the convergence of carrier and enterprise ICT solutions for an unmatched array of tier one

customers

Combined enterprise expertise with project management skills necessary to win large public projects

Ability to penetrate new business segmentslike SMEs - via nationwide channel partners & in-house service deliveryorganization

Access to new verticals for sizeable R&D team to create proprietary and higher-margin products

The market is taking notice of Neta strategic direction, with increasing support from suppliers and customers #1 Systems Integrator in Turkey; 21stbiggest ICT company in Turkey (Source: Interpro Bilisim 500, 2013)

Turkeys 18thfastest growing company; #1 fastest growing ICT company in Turkey (Source: Capital magazine, 2013)

Cisco Global Enterprise Partner of the Yearthe only company in Turkey awarded with this global title to date

Netahas won several major projects requiring combined carrier & IT expertise

Going forward, Neta growth strategy is based on providing vertical-specific value-added solutions in Turkeyand the surrounding region

Owned software. Netahas utilized its R&D expertise to create a messaging app and network monitoring solution forTurkcell. The company is currently working on new applications for the utilities sector, SME businesses (e.g., ERPsolutions) and public safety.

Outsourced and managed services. Netahas won service contracts to manage Wi-Fi hotspots for SuperOnline / TurkTelekom and unified communications equipment at Akbank branches.

International expansion. As the largest systems integrator in Turkey, Netais well positioned to grow in Bangladesh, CIS(including Kazakhstan), Middle East and North Africa. Neta international business has grown from almost zero in 2010 to~$20mm this year.

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Turkish ICT market is growing rapidly to meet

ambitious 2023 national targets

19.021.6

4.0

4.6

7.0

8.5

1.1

1.4

0.7

1.0

2013E 2016E

Telco

Operators

(e.g., Turkcell

subscriberrevenues)

Carrier HW

(e.g., routers,

RAN, VoIP)

IT HW (e.g.,

tablet, laptop,

phones, WLAN,

etc.)

IT Service

IT SW

5%

5%

7%

11%

13%

CAGR

13-16E

$32bn

$38bn

Turkish ICT Market Evolution 2013E-2016E

Source: IDC March 2013, Netamanagement estimates

Rapidly growth across the Turkish

ICT market

Commentary

Highest growth in Neta addressable markets

Turkish ICT market grew at 12% CAGR 2011-2013 in TRY terms, and hit ~$30bn total

market size in 2012

Software (~10% of non-operator market) and services (~15%) expected to reach

~65% of non-operator ICT spend (matching current US / EU average share levels) in

next decade, driven by Cloud Computing, Enterprise Communications, Big Data, etc.

Main verticals today are Finance, Government, Telecom, Manufacturing, but

Utilities, Healthcare and SMEs are growing

Neta SI addressable market estimated at ~$3bn, consisting of IT SW, IT Service, ITHW (excluding direct sales of ~$5bn), Carrier HW

Growth supported by Government spending through 2023

Governments 2023 plan targets G-10 entry for Turkey, with $500bn in exports and

a $2trillion economy

ICT target market size by 2023 is ~$160bn, to be achieved by:

- Increase to ~$10bn in software exports

- Broadband subscriber growth from 20mm to 45mm, with 1GBps connectivity- Growth in R&D share of GNP from 1% to 3%

- Turkey as IT Outsourcing hub to EMEA region

- Turkish datacenters as regional / global data hubs

Source: Interpromedya Biliim 500, 2013

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Enterprise grade product resell & solution design

Market access in financial services and general

industry clients

Service delivery (through BDH) nationwide

Probil (acquired October 2011)

Capabilities

2011 Headcount: 571

Network & Security (Cisco)

Enterprise Solutions

Outsourcing & Field Services

Microsoft licensing resale

Business segments

Partners (sample)

Carrier grade network systems integration

R&D skillset with >600 engineers

Large & complex project delivery for private

telcos, Turk Telekom, and defense

Nortel Neta(established 1967)

Capabilities

2011 Headcount: 778

Systems Integration (resale & service)

Technology (outsourced R&D, support)

Defense (R&D, manufacturing & services)

Business segments

Partners (sample)

Revenue ($mm)Revenue ($mm)

Carrier, enterprise and converged systemintegration , with unique ability to execute most

complex projects

Vertical focus for proprietary R&D and solution

design (e.g., proprietary LTE solution)

Neta

Capabilities

2012 Headcount: 1,653

Business segments

Additional Partners (sample)

Revenue ($mm)

279307

2011PF 2012A

64 103 103 99

2007 2008 2009 2010

79 119 141 137180

2006 2007 2008 2009 2010

Public (Government, Defense)

Enterprise (Finance, Telco, Utility, Healthcare,Education, SME)

International (Telco, other)

Technology

Neta R&D output:

4G LTE

Loupe (E2E msg)

Multimedia Soft Client

NetaDinamik ERP(Microsoft Navision)

Neta is now uniquely positioned to offer both

enterprise IT and networking services

Source: Neta& Probil financials, public filings, Netamanagement

+ =

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Netahas unrivalled access to top tier customers across

key Turkish ICT verticals

Utilities

Telecom

General

Industry

International

Technology/R&D

Government &

Defense

Financial Services

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An excellent management team carrying longstanding

customer relationships

M. Ali Tombalak

16 yrs at Probil/Neta

24 yrs in ICT

Enterprise Sales

Mujdat Altay

9 years as CEO

33 years at Neta

CEO

Ilker Caliskan

CFO

Gonul Kamali

21 yrs at Neta

Carrier

Technologies

Kamil Orman

29 yrs at Neta

Public SafetyAli Kuralkan

Photo

2 yrs at Neta

19 yrs ICT (Cisco, ALU)

International Sales

Ahmet Sukuroglu


14 yrs in ICT

Government

M. Necmi On

Photo


20 yrs in ICT

CTO

Ayse Dogrusoz

6 yrs at Neta

14 yrs in ICT

Human Resources

8 yrs at Neta

10 yrs at Deloitte

Biographical highlights

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And support from a world-class R&D center committed to

innovation

Technology department overview

NetaR&D group was established in 1973

Netaemploys 678 engineers focused on R&D and customer support,

with >25% holding graduate degrees

469 engineers support Genband in the development of its

multimedia and VoIP communications technologies

110 engineers focused on development of public safety and defense

applications in Turkey

99 engineers dedicated to developing proprietary software for Neta

local verticals

Global R&D Center status (Center of Excellence), and winner of Turkish

Software Export Champion title three times in last five years

Value proposition to outsourced development clients is low-cost R&D

engineers with comparable productivity and English language skills vs.

European peers

Heritage of product and software development positions Netaas the

leading developer of proprietary, local solutions for its clients across

multiple verticals

Illustrative technology development

projects

4G LTE

Government contract to develop 4G LTE for Turkeysemergency communications platform; technology hasbroader uses in defense and civilian applications

Turkish SME market

Localized version of Microsoft Navision ERP system

NetaLoupe

Developed with Turkcell, Loupe is a monitoring tool forValue-Added Services in IP networks (e.g., SMS, IPTV)

Utilities Vertical

Machine-to-machine automated meter reading applicationsfor energy consumption optimization

Outsourced development projectsGenband

Long-term partnership for developing multimediacommunications platforms

First success in VoIP switching, SIP trunking; now Netaistrusted with critical unified communications platforms

Turkcell

Several projects including network monitoring, usermessaging and e-payments

Innovation incubation through NWCTF

NetaWesley Clover Tech Fund is an entrepreneur-led

commercialization fund specializing in seed-stage investments into

technology companies in Turkey

The initiative is a partnership between Neta, Sir Terry Matthews

(Wesley Clover), and TRPE Capital

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Netais the largest and fastest-growing standalone systems

integrator in Turkey

550460

193112 73 62

672

368

171 128 100

Ericsson Neta KoSistem ALU Sentim Atos Turkcell

Teknoloji

Datamarket Innova Bimsa Sekom

2012 revenue for Netaand selected Turkish market competitors

Source: Interpromedya

TRY mm

Global Players

Local SIs

Local Telcos

Netais #1 Turkish

systems integrator

Netais the Capital 500

#1 fastest growing ICT

company, and 18th

fastest growing companyin Turkey

Netais now a regional,

converged systems

integrator with R&D and

a tier 1 partner

ecosystem

Neta

Players: IBM, Accenture,

Atos, Ericsson

Strength: complete

solutions / product

portfolios, global R&D

Weakness: limited

customization /

localization, high pricing

in consulting services

Global Players

Players: KocSistem,

Sentim, Datateknik

Strength: captive

conglomerate parents

(e.g., KocSistem, Bimsa)

Weakness: limited R&D

capability, low scale, in-

ability to address

complex or converged

projects

Multiple recent

bankruptcies (e.g.,

Meteksan, Servus)

Local SIs

Players: Argela, TT

Teknoloji, Innova,

Vodafone Oksijen,

Turkcell Teknoloji

Strength: captive telco

parents, governmentrelations

Weakness: limited

solution portfolio,

inability to address

enterprise IT needs

Local Telcos

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Recent converged carrier / IT contract wins

Turkish Football Federation Akbank Ministry of Justice

Project entails next

generation stadiuminfrastructure and software

with 5 year service

agreement for 28 stadiums

Access control & security

(ID cards, CCTV)

Fan interaction (fan

database, ticketing system,

loyalty system, e-payments,call center)

Wireline & wireless

network infrastructure

Competed against

Accenture, ATOS, IBM,

Indra, Cisco, Gate

Elektronik, Proline, MTM

$55m win

Installation and

support of 16k+ IPtelephony lines for

Akbank hosted by Turk

Telekom

5 year contract with

Akbank to provide

maintenance andsupport services for HQ

and 1,000+ branches

Competed against IBM

$46m win

Connected 2,270 courts and

penitentiaries via videoconferencing systems

Includes 2 year service

agreement

$30m win

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Financial overview

0

50

100

150

200

250

300

350

FY06 FY07 FY08 FY09 FY10 FY11 Nine

Months

12

FY12 Nine

Months

13

Order Booking $ Revenue $

$0

$5

$10

$15

$20

$25

$30

$35

$40

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

FY06 FY07 FY08 FY09 FY10 FY11 Nine

Months

12

FY12 Nine

Months

13

GM $ GM %

Order Booking

c.20% CAGR in the last 7 years

YTD 2013 order booking is $314myear over year growth

is 40%

Breakdown of order booking by segments for FY12:

87% SI 9% Technology

4% Defense

Revenue

c.25% CAGR in the last 7 years

YTD 2013 revenue is $182m - year over year growth is 17%

Breakdown of revenue by segments for FY12: 84% SI

11% Technology

5% Defense

GM contraction is due to change in product mix

Carrier grade products vs enterprise grade

resell products

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Turkish SI Market Outlook

Thank you

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Netas company overview