LOOP — Investor Presentation 2023

Nov 15, 2023

www.looptelecom.com
Loop Telecommunication Int‘l, Inc.
Investors’ Conference

Nov. 15, 2023

Dr. Mawlin Yeh

1

Disclaimer Concerning Expectations

Certain of statements given herein, verbal or written, are expectations, which are best estimates of our future performance. Actual results may differ significantly due to many uncertainties.
Examples of such uncertainties include but not limited to (a) local and global regulations, (b) market demands, and (c) competitive landscape.
Such changes in expectation may not result in any notice on our part.
2

Agenda
3

Loop Telecom Highlights

Established in 1991, IPO (TSEC) in 2002
Headquarters: Hsinchu Science Park, Hsinchu, Taiwan
Products/Solutions & Technologies
Network Managements
WDM Solutions for OTN Layer
SDH/SONET-MPLS Hybrid Transport
MPLS Transport Solutions
Universal Access Aggression Multiplexer
L2/CE/L3/MPLS Packet Transport Networks (PTN)
TDM over Ethernet (TDMoE)
5G for MCC Solutions
MCC Physical/Environment & Information Security
Next Generation Office Networks

For Mission Critical Communication (MCC) Backbones Markets
For MCC’s 5G Distribution Markets
For MCC Security and
Enterprise NG Office Secured Networking Markets
4

Loop Telecom Headquarter

Design Center
Factory

EMC Chamber
Network Emulation Beta Testing Facility
5

Factory Audits ?by Large Telecom Companies

US Companies: November 2001, September 2007, ?February 2011, February 2012
Finland Company: August 2004
French Companies: July 2004, July 2005
Japanese Companies: December 2008, February 2009

6

Corporate Technology Milestones

MCC Backbone
OTN
MCC Communication Solutions:
Converter: 1992 ~
Access: 1997 ~
Transport: 2007 ~
OTN: 2022 ~
5G: 2024 ~
Security (Physical/Environment & Information) Solutions:
IIoT (Physical/Environment Security): 2022 ~
GCB: 2023 ~
MCC Firewall: 2023 ~
Enterprise Secured Networking Solution: 2023 ~

Transport
Access
RTU

Local
Distributions

RTU
7

Agenda
8

Loop Telecom
- Consolidated income statement -
112/1/1~112/9/30

9

Loop Telecom
- Consolidated balance sheet -
112/9/30

10

According to the Loop's consolidated financial report for the first three quarters of 2023, the cumulative in EPS after-tax was $1.56.
Loop Telecommunication International, Inc. consolidated net operating income in the first three quarters of 2023 was NT$400M, an increase of 16% compared with the same period last year. Its gross profit margin in the first three quarters was 62%, which was 51.66% at the same period last year, an increase of 10.34 percentage points. The gross profit margin in the third quarter was 63.22%, an increase of 2.45 percentage points from the second quarter gross profit margin of 60.77%, and better than expected mainly due to cost reductions and favorable exchange rate factors.

The consolidated revenue and gross profit margin up to the end of the third quarter are also the highest in the past three years. Since 2019, the gross profit margin has reached over 50% to 60%, the rate is the best in the Taiwan telecom’s industry.

The consolidated operating profit for the first three quarters of 2023 was NT$69M, an increase of 605% compared with the same period last year. The after-tax earnings were NT$1.09 billion, an increase of 74.83% from the same period last year, and the after-tax earnings per share were $1.56. The after-tax earnings in the third quarter were NT$34M, an increase of 5.39% from the second quarter and an increase of 100.40% from the third quarter last year. The after-tax earnings per share were $0.48. Loop's after-tax earnings per share in the past five years was $0.70 in 2019; $1.11 in 2020; $0.47 in 2021; $0.95 in 2022; and $1.56 in 2023Q3 respectively.
The company’s future performance outlook is as follows:
Continue to develop business model evolutions with effective resource management, resulting increases of Gross Profit Margin (GPM), Operating Profit Margin (OPM) and Net profit margin (NPM) significantly.
The new product (G7800) will be launched in this quarter. The launch of new generation of multi-protocols, multi-services integrated transmission/access equipment and next-generation network security solutions will become state of the art solutions to fulfill new MCC backbone requirements.
Most of MCC backbone infrastructure are aging and will enter into replacement in the next 5 ~ 10 years. The new MPLS technology will replace the current SDH/SONET. Loop has developed various solutions to fulfill market’s needs and shall bring in a more optimistic performance in the future.

11

Agenda
12

Notes:

Loop’s MCC Communication Solutions

MCC Backbone Networks
Network Architecture
Multi-language
Management
(EMS/NMS)

OTN
OTN

WDM1800

Transport

Transport

G7860A
O9400R
O9500R
G7800R

Access
Access

RTU
RTU
AM3440

Local
Distributions

Local
Distributions

AM3440E
G7820
IP6704A
W8510
Network Architecture: OTN Units + Transport Units + Access Aggregation Units + RTUs/Local Distribution
OTN Layer: Optical Wavelength Switch/Transport; WDM1800
Transport Layer: SDH/SONET, MPLS; O9400, O9500, G7800, G7860A
Access Aggregation Layer: Ethernet, SDH/SONET, TDM, Voices, Applications; AM3440
RTU/Distribution Layer: Customers’ Equipment & Local Distribution Networks, G7820, IP6704A, AM3440E, W8510

13

Notes:

A New Generation MCC Multi-Protocol, Multi-Services, High-Capacity, All-in-One Transport/Access Product

The G7800 is an new generation all-in-one Transport/Access Platform product which supports:
High-Capacity with 100G/10G/1G Optical Links
MPLS-TP, Carrier Ethernet, L2/L3 for Packet Transport
SDH/SONET for Synchronous Optical Transport
PDH/TDM Services
Ethernet for Ethernet Services
MCC’s special services
Security & Secured End-to-End Communication

G7800 has “Brand Protection” optional function to protect major partner’s market investment.

It is also a platform which major partners could add their own functions and plug-in cards for their exclusiveness.

Major partners can also request for a exclusive chassis and becoming their own solutions.
14

Loop’s Physical/Environment & Information Solutions

Compliance
Management
Config Backup
Management

Compliance
Check
Built-In
Scheduler

Scheduled
Configuration
Backup

Configuration
Backup
GCB-NCM/Linux

Change
Analysis

Change
Monitoring
Config Change Analysis
Config Change Monitoring

Configuration Auto-Audits on Linux Servers/Firewalls to follow Government’s Guidelines
Physical & Environment Security
Loop-IIoT 0510 Physical/Environmental Security Monitoring System is designed for a variety of unattended and surveillance required locations such as: Data centers, IT rooms, Network infrastructure, Military camps, airports, government buildings, transportation stations, etc.
ISS2110 GCB includes five major functions: Compliance Check, Scheduled Configuration Backup , Change Monitoring, Change Analysis, and Backup management.
15

Loop’s Physical/Environment & Information Solutions

Train
IPsec

IPsec

IPsec

OCC/BOCC

Wayside

Encrypted IPsec Tunnel

1. Next Generation Three-Layers Office High-Speed Networks
2. Secured Connections between HQ and Branches
3. Centralized Physical/Environment Control using IIoT Technologies
4. Centralized Information Security Management integrating needed minimum set of Security Solutions such as Firewall, GCB, Anti-Virus, DLP, User’s Behavior AI, Audit/Forensics, …
   OT Firewall for MCC Networks
   Loop-ISS2150 MCC Firewall is aimed to manage and enhance the security of the MCC Networks by utilizing the firewall to isolate security zones between different network areas to better protect and block the inbound information flow from cyber Attacks.
   Loop-ISS2180 Next Generation Secured Enterprise Networking Solutions is aimed to provide very high speed office LAN using MCC WAN technologies plus information and physical security technologies.
   16

Agenda
17

MCC Markets
Utilities
Transportation
Oil & gas
Government:
Public Safety/Homeland Security/911
Military & Defense
Police Networks
Aviation/Airport
Education
Marine
…
Mining
Enterprise
…
18

Notes:

The Evolution of the MCC Markets Needed Products/Solutions

Market Size

OTN

OTN
MPLS (50)

MCC Backbone Networks

IP/MPLS; MPLS-TP
L2/CE/L3
TDM
WDM
IP/MPLS; MPLS-TP
L2/CE/L3; HSR/PRP
SDH/SONET
PDH/TDM
SDH/SONET (50)

OTN
OTN
MPLS-TP
L2/CE/L3
SDH/SONET
PDH/TDM

Transport

Transport

Transport
SDH/SONET
PDH/TDM
Transport
Transport

PDH-Mux (50)

SDH/SONET
Hybrid-Mux (40)
SDH/SONET/MPLS (30)
Access
Access

MPLS-TP
L2/CE/L3
SDH/SONET
PDH/TDM
RTU
RTU
RTU
RTU
TDMoE(40)

CSU/DSU(50)

5G CPE
IP/MPLS; MPLS-TP
L2/CE/L3
PDH/TDM
Access/Distribution

61850 HSR/PRP

Converter

TDM
TDMoE
2050
1980
1970

1990
2000
2010
2020
2030
2040
Years
WDM1800
2022~
O9400R-PTN10G
O9500R-PTN10G
2018 ~2040;
2022~2030
O9400R-CC4/CC16
2007~2022; 2011~2020
G7860A
2015~2040; not yet
O9500R CC4/CC16
2011~2022; 2011~2022
G7800
2024~
AM3440-CCA/CCB
2000~2022; 2004~2022
AM3440-CCPB
2019~2040;2023~2050
G7820
2019~2050; not yet
5G CPE
2025 ~
CSU/DSU
1992~2020;1992~2010
IP6704A
2016~2050;not yet
19

Agenda
20

Conclusion
MCC Markets are big and requiring total solutions with customizations.
To develop Cost Effective Multi-Protocols Multi-Services All-in-One Solutions to provide flexibilities to Customers’ applications and to reduce cost, space & energy requirements.
Continue to Develop MCC Distribution Solutions: G7802, 61850/HSR/PRP, IP6704A, AM3440E, W8510 5G CPE
Continue to Develop Next Generation Cyber Security Solutions.
Our new Generation MCC Backbone Solutions (G7800R/Hybrid-AM3440/WDM1800 under a Single Management System) will attract more International SI Partners with “MCC Solution Foundry House” Business Model.
Currently, Loop is one of the top three MCC solutions providers in the world. Facing the replacement trends of aged backbone infrastructures in the next five years, Loop will promote the new Generation MCC Backbone Solutions and work closely with partners worldwide to continue to develop the global MCC markets for high growth momentum.
21

www.looptelecom.com

Multi-language Website

22

Agenda
23

24