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Investor Presentation

Investor Presentation. Presentation Summary. Our Company. Our Business. Our Industry. Growth. Our Financials. BEE. Our Listing Rationale. 2. 2. We design and manufacture antennas Established for 17 years Revenue CAGR of 50% since 2001 Projected exports > 50%

kamal-arnold
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Investor Presentation

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  1. Investor Presentation

  2. Presentation Summary Our Company Our Business Our Industry Growth Our Financials BEE Our Listing Rationale 2 2

  3. We design and manufacture antennas Established for 17 years Revenue CAGR of 50% since 2001 Projected exports > 50% World class R&D capability Supported by strong growth in wireless data markets Raising of R20m on company value of between R90m and R110m (Fwd PE of 4.7 and 5.8) Our CompanyExecutive Summary 3

  4. Our CompanyStructure Currently being implemented 100% 4

  5. Our CompanyHistory & Milestones • 1990: Established consulting company at Wits University • 1997: Poynting (Pty) Ltd was formed • 2001: Poynting Antennas was formed, moved to Wynberg and started manufacturing • 2005: Established: • The Commercial Division (Cellular and wireless data antennas) • The Defence & Specialised Antenna Division (EW & DF) • 2007: Poynting Direct physical and online stores for distribution of Poynting products to end users • 2007: Poynting Europe GmbH which distributes commercial and defence products in Europe 5

  6. Our CompanyVision ‘Making Wireless Happen’ 6

  7. Our CompanyOrganogram Defence Commercial CommonResources Non executive Chairman Coen Bester Non exec directors Mike Hill / Zuko Kubukeli Chief Executive Officer Andre Fourie Managing Director Juergen Dresel Chief Technical Officer Derek Nitch R&D Sales Production & Prototyping Finances & Admin QA Logistics and Manufacture Wireless & Cellular Business Units Sales R&D 10 2 12 10 8 100 2 9 10 Total Number of staff = 163 7

  8. Our CompanyStakeholders (post listing) Management 75% Staff Empowerment Trust 3% Institutions / Investors 22% 8

  9. OUR BUSINESS

  10. Our BusinessWhat we do Cellular Products Wireless Data Networks Technology World Class Antenna Technology Defence & Specialised projects & products 10

  11. Our BusinessWhat we do Sales per technology category from January – December 2007 Total R50.9 million Export and Local Sales per division from January – December 2007 Total R50.9 million 11

  12. Our BusinessClients

  13. Our BusinessCompetitive Advantages • International recognition of manufacturing technologies • Well developed sales and distribution channels • Network Operators • OEM’s (Original Equipment Manufacturers) • Direct distribution • The Poynting brand • Innovative niche products • Continuous development of new products & range • Price and performance competitiveness • Unique patented manufacturing technologies • Low labour component (15% of COS) • Chinese relationships • ‘Technology agnostic’ nature of products 13

  14. OUR INDUSTRY

  15. Our IndustryWhere we function Device manufacturers (embedded antennas) Wireless internet & cellular service providers Networking Integrators Tracking Antenna Products & Applications Military Industry EDGE 3G HSDPA 15

  16. Our IndustrySA Market • Current product set SA market size ± R150 million • Market for new whole products in SA an additional R600 million • 30% CAGR in cellular market • (2001 – 2006) • SA is one of the most advanced telecoms systems of all emerging markets • Wireless connections (e.g., EDGE, 3G, HSDPA, iBurst) overtook ‘wired’ internet (ADSL) in 2007 • SA Broadband internet usage ±2-3%, increasing by 50% p.a. • CAGR of 52% in mobile data revenue since 2001 16

  17. Our IndustryGlobal Market Trends • Growing use of wireless for internet access • Machine-to-machine communication to play a growing role going forward • Rapidly falling electronics costs enable widespread adoption of new wireless applications • Antennas constitute 10%-20% (& growing) of this market • The global wireless technology market • ± $25 billion* *This excludes the cellular market which is much larger, which Poynting only addresses a subset of (modems and devices) 17

  18. Our IndustryGeographic Positioning Defence customers > R400 000 per annum Commercial customers > R400 000 per annum • The footprint of companies currently purchasing smaller amounts is much more extensive with many of these displaying scope for further extension 18

  19. Our IndustryCompetition • High barriers to entry • Poynting is the dominant manufacturer in SA market. Most competition from imports. • Competitors: Webb Industries, Pacific Wireless (USA), Maxrad (USA), MTI Wireless (Israel), Kenbotong (China) • International “giants” do not compete in the “new” markets of cellular cpe and wireless data 19

  20. GROWTH

  21. GrowthPersonnel • 3 PhD, 7MSc, 11 BSc, 3 Technicians • Good corporate governance • 3 PhD, 4MSc, 11 BSc, 3 Technicians 21

  22. GrowthGrowth strategy Growth in the wireless market “Triple Play Plan” Growth by entering new countries Grow product range 22

  23. GrowthSales prospects for FY2009 Total Sales Prospects ±R130 mil R7 mil → Poynting Direct: Branches & organic growth (SA & Africa) R10 mil →Introduction of new products R10 mil →Sales into new markets R15 mil → New OEM contracts to supply large international manufacturers R20 mil →Defence and specialised R20 mil→100%+ growth in Europe through Poynting Europe R45 mil → Estimated 20-30% growth in current customers/markets 23

  24. OUR FINANCIALS

  25. Our FinancialsTurnover (June) 76% 29% 62% 133% 25

  26. Our FinancialsProfit After Tax (June) 105% 515% 38% 300% 26

  27. Our FinancialsKey Revenue Ratio’s 27

  28. Our FinancialsIncome Statement Notes: 1.The above income statement takes into account the effects of the anticipated issue of shares. 2. Capital raised of R20 million on listing less estimated share issue costs of R1.676 million. 3. Surplus cash will be applied to the organic growth of the business in the short to medium-term and therefore no dividends are planned for the forecast period. 4. Poynting takes advantage of research and development allowances in their tax computations, resulting in a reduced tax charge and a lower effective tax rate. 28

  29. FinancialsBalance Sheet - Condensed 29 1. The increase in instalment sale liabilities is due to the financing of property plant and equipment. 2. Capital raised R20 million (20 million shares of R1). Share issue costs of 1.676 million deducted from share premium.

  30. BLACK ECONOMIC EMPOWERMENT

  31. Black Economic Empowerment • Keen to enhance our BBBEE rating • Establishing an Employee Empowerment Trust - will own 3% equity of the company • Seeking genuine participation by an empowerment partner which will add value to the business • Employment Equity Plan has been submitted 31

  32. OUR LISTING RATIONALE

  33. Rationale for listing • Raising of money to supplement current cash resources: R5 mil R8 mil R4 mil R4 mil R10 mil 33

  34. SWOT Analysis • Strengths • Established business model • International customer base • Antenna design capabilities and tools • Brand equity (the Poynting brand) • Technologically agnostic • Intellectual property • Product portfolio • World leaders in certain commercial and defence products • Research & Development • Unique, cost effective manufacturing processes • Innovative / flexible solutions • Opportunities • Globalisation • Growth in fixed wireless markets (wireless data & cellular) • Replacements / new infrastructure typically wireless • Increasing market share in SA, Africa & Europe • Attractive markets of E. Europe, USA, Asia & S. America • Remote office space • “Whole” products - Integration of antennas into complete systems • A weakening Rand’s positive affect on margins and competitiveness • Capital injection will leverage much faster growth • Weaknesses • Technology is capital intensive • Length of cycles (implementation, manufacturing, delivery) • International distribution channel development for branded products • High transport costs to international clients • Restricted cash flow has limited number of technical staff for product development • Resource / funding restrictions constrain registering of patents and designs • Threats • Unqualified entrants into the market • Low cost international products • Increase in energy prices • A strengthening rand harmful for exports • Consumer devices with integrated antennas and no connectors for external antennas 34 34

  35. Summary • Excellent international growth prospects • Strong, experienced management • Highly qualified and experienced R&D team is the company core strength • Innovative product range • Very high historical company growth with strong future prospects • Seeks to list in June 2008 • Intends to raise R20 million through private placement 35

  36. Thank You & Questions 36

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