Sinopac Securities Europe NDR November 2 0~ 27 , 2006 1 Safe Harbor - - PowerPoint PPT Presentation

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Sinopac Securities Europe NDR

November 20~27, 2006

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All numbers are consolidated. Except for statements in respect of historical matters, the statements contained in this release are "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results

• f operations of D-Link Corporation to be materially different

from any future performance, financial condition or results

• f operations implied by such forward-looking statements.

Safe Harbor Statement

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All numbers consolidated except otherwise specified. 2Q/06 numbers are pro forma ..

Industry Outlook

Regional Growth Product Drivers Overall Business Updates

Agenda

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Industry Outlook

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20000 40000 60000 80000 100000 120000 140000 160000 180000 200000 2004 2005 2006 2007 2008 2009

SMB/SOHO Networking Equipment Demand

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CAGR 20%

Source:IDC, FY2006

US$ Million

SMB demands outgrow consumer’s in 2006 & 2007 High-end switches continuously deployed worldwide Security & IP Storages (SAN) gradually ramping up

WW SMB and SOHO Networking Market

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LAN switching market growth remains solid L2 & L3 outgrow L4-L7 Modular declines but stackable grows

2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 2004 2005 2006 2007 2008 2009 F.E. GigE

57% 43% 69% 31% 78% 22% 85% 15% 90% 10% 94% 6%

US$ Million

Source:IDC, FY2006

Switching

GigE CAGR 16%

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1000 2000 3000 4000 5000 6000 7000 8000 9000 2004 2005 2006 2007 2008 2009

802.11b 802.11g 802.11a+g 802.11n

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WLAN

Source:IDC, FY2006

IEEE delays 802.11n ratification WiFi association starts to test draft N from Jan/07 Draft N gradually ramping up from 2H/07 WiMAX emerges in some areas without last mile

64% 34% 2% 16% 68% 16% 9% 72% 15% 4% 3% 48% 20% 29% 1% 33% 13% 53% 27% 10% 63%

CAGR 15%

US$ Million

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20000 40000 60000 80000 100000 120000 2004 2005 2006 2007 2008 2009 Cable Modem ADSL FTTX Advanced Technology

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Broadband

VoIP devices rapidly penetrate IAD/Triple Play ramping up in N.A. & Japan

28% 66% 5% 1% 26% 67% 6% 1% 25% 66% 7% 2% 24% 65% 8% 3% 23% 64% 9% 4% 22% 63% 10% 5% US$ Million

CAGR 17%

Source:IDC, FY2006

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Regional Growth

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4000 8000 12000

3Q05 4Q05 1Q06 2Q06 3Q06

North America Europe Asia Pacific & Others

31% 24% 45% 48% 25% 27% 41% 28% 31% 52% 21% 27%

NT$ Million

Revenue by Regions

Consolidated

25% 23% 52%

3Q/06 revenue QoQ comparison: N.A. rose 8% Europe jumped 29% AsiaPac & Others seasonally up 15% In NT$ terms, WW 3Q revenue grew 16%

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29% 29% 19% 17% 23% 22% 20%

50 100 150 200 250 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 0% 5% 10% 15% 20% 25% 30% 35% Emerging Markets Sales D-Link Brand Sales Emerging markets Sales as % of Brand Sales

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Emerging Markets vs. D-Link Brand Sales

US$ Million

33 50 39 43 43 62

Emerging markets remain the fastest growing area YT3Q06 sales growth over 54% YoY

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Localization

In Country Operation

Products Differentiation

Customization

Technical Supports

Real-time after Service & RMA

Strength in Emerging Markets

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Product Drivers

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3000 6000 9000 12000 3Q05 4Q05 1Q06 2Q06 3Q06

Switch W LAN Broadband Digital Home NIC & Others NT$ Million

Revenue by Products

Consolidated

3Q06 revenue QoQ comparison: Switch grew 23% WLAN increased 15% Broadband up 18% Digital Home rose 12%

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26% 7% 31% 8% 28% 6% 11% 26% 32% 25% 5% 10% 27% 35% 23% 6% 11% 27% 30% 26% 27% 30% 28% 10% 5%

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High-end switch sales in YT3Q06 delivered over 87% YoY growth Pull-through more SMB products such as Security, IP Storage (SAN) Switch remains the highest margin amongst all of product segments

500 1000 1500 2000 2500 3000 3500 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 F.E. GigE

32% 68% 47% 53% 35% 65% 44% 50% 50% 56% 55 % 45% NT$ Million

Switch Sales Breakdown

61% 39%

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500 1000 1500 2000 2500 3000 3500 4000 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06

802.11b 802.11g 802.11a+g MIMO/802.11n draft

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WLAN Sales Breakdown

In terms of D-Link WLAN Breakdown, 11g remains the largest pie Super G MIMO / Pre-N gradually ramping up, over 70% QoQ growth for 3Q06

13% 78% 9% 8% 83% 9% 2% 88% 10% 1% 89% 10% 2% 86% 8% 4% 87% 6% 7% NT$ Million 4% 86% 10%

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500 1000 1500 2000 2500 3000 3500 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 ADSL VoIP/IAD/VDSL

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Broadband Sales Breakdown

VoIP worldwide continuously deployed by Telco/ISP D-Link VoIP sales in 3Q06 delivered over 181% YoY & 30% QoQ growth

95% 5% 90% 10% 85% 15% 83% 17% 78% 22% 65% 35% NT$ Million 63% 37%

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Overall Business Updates

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19% 10% 7% 27% 27% 17%

0% 5% 10% 15% 20% 25% 30% SMB/SOHO Switch WLAN Broadband

1Q 2006 2Q 2006

Market Shares by Products 16

Dominance in Key Segments

D-Link is, in unit terms, #1 in SOHO/SMB Ethernet LAN Switch #2 in Home/SOHO WLAN, next to Linksys/CSCO #5 in Broadband XDSL, after Siemens, Thompson, and etc. Source: In-Stat Research Reports, 1Q 2006 and 2Q 2006

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#1 in SOHO/SMB Market

Linksys 20.4% Netgear 14.8% 3Com 10.5% Others 14.5% Belken 1.1% HP Procurve 3.7% Zyxel 1.1% Siemen s 1.3% Thomso n 1.2% Allied Telesyn 3.3% Linksys 20.4%

23.8%

Source: Compiled from In-Stat 2Q 2006 Wireless LAN Equipment Market Share Report In-Stat 2Q 2006 Ethernet LAN Switch Market Share Report In-Stat 2Q 2006 Broadband Equipment Market Share Report

Netgear 14.8%

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2Q/06

Nortel 1.7%

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New Products Releases

2-bay SATA network storage enclosure

• Internet file sharing
• Critical failsafe Disc mirror
• Built-in media server function

2-bay SATA network storage enclosure

• Internet file sharing
• Critical failsafe Disc mirror
• Built-in media server function

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22 New Product Announcements in Q3 Significant Highlight: L2+ Wireless switches

• 24 wireless or wired ports
• Central management
• Secured and seamless

roaming

L2+ Wireless switches

• 24 wireless or wired ports
• Central management
• Secured and seamless

roaming

Day & Night, Audio & Video IP Cam

Full-featured Wireless Surveillance Camera Support 16 simultaneous viewing and motion detection

recording

Day & Night, Audio & Video IP Cam

Full-featured Wireless Surveillance Camera Support 16 simultaneous viewing and motion detection

recording

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41% 44% 2.80% 4.70% 4.10% 4.81% 3.00% 40% 35% 31% 12% 10% 47% 89% 56%

0.0 1.0 2.0 3.0 4.0 5.0 6.0 2001 2002 2003 2004 2005 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Stock Dividend C ash Dividend EPS Adjusted EPS Payout ratio Yield rate Employees' Bonuses as % of Net Income

Dividend & EPS 19

High Dividend Payout

NT$ Per Share

Payout more cash over stock High yield rate Limited employees’ bonuses dilution

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4Q/06 Outlook

Consolidated 4Q Guidance

4Q revenue flat sequentially Gross margin maintains 31%

Upsides

Thanksgiving & Christmas shopping in N.A. & Europe Emerging markets continuously grow

Downsides

11n ratification delays Cool down of economy

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For complete financial and press releases, please visit http://ir.dlink.com

Q & A