Business Wire

ADVA unveils path to higher profitability at 2021 capital markets day


ADVA (ISIN: DE0005103006), a leading provider of open networking solutions for the delivery of cloud and mobile services, held its virtual capital markets day on March 23, 2021. During the event, the company outlined its path for accelerating growth with higher profitability levels aiming at 10% of revenues by 2023. Cash flow generation will become another key area of value creation. “Our focus on innovation leadership required high R&D investment – often at the expense of higher profitability,” explained Brian Protiva, CEO, ADVA. “But now we started to see returns from several new technologies we’ve brought to market,” he added. Brian Protiva cited three main drivers that will fundamentally change the business and increase enterprise value:

This press release features multimedia. View the full release here:

Brian Protiva, CEO, ADVA (Photo: Business Wire)

Brian Protiva, CEO, ADVA (Photo: Business Wire)

  • New applications and growth in new verticals
  • Software and service revenue expansion
  • Verticalization opportunities

A fundamental change of business model
Also at the event, ADVA CTO Christoph Glingener discussed new opportunities resulting from megatrends, such as digitization, deglobalization and decarbonization, which require innovative and differentiated technologies. ADVA’s recent investments in new technologies tackle these trends and provide access to new markets in which ADVA can operate in a highly differentiated way. This enables above-average growth rates and higher profitability. New applications and markets with a high degree of differentiation are one important pillar of the strategy. “Revenue growth of our network synchronization technology area has outperformed other technologies and will continue to increase disproportionately. With our technology investments of recent years, we can address new higher-value applications with carriers and ICPs and open up new markets outside these customer groups. Revenue contribution from non-telco customer segments will grow from approximately 30% last year to over 40% in the next three years,” explained Brian Protiva. The company aims to leverage innovation leadership in synchronization, security and network operating systems. “Partner expansion with global IT solution providers as well as expanding and upskilling the company´s sales force in growth areas will open the door for a revenue contribution of 40% by 2023,” added Scott St. John, CMSO, ADVA.

Increased growth in software and services will positively impact customer retention and further increase ADVA’s margins. “In recent years, we’ve been steadily increasing the share of software and services in our revenue to around 20%. In 2020, the contribution grew further to 23%,” stressed Brian Protiva, citing that 30% revenue contribution is a priority during the next three years. ADVA is going to leverage new tools and products in this area. State-of-the-art software licensing platforms, the ramp-up of new NOS (network operating systems) products and the expansion of partnership models for IT will be key to increase the software share. The company sees a higher attachment rate through software and new services, including AI-based risk mitigation and predictive maintenance.

Control of crucial parts of the value chain is a key aspect in the telecommunication industry. This includes components and subsystems that either ensure additional differentiation on the product side and increase competitiveness or decisively improve the cost basis of ADVA’s own solutions. Brian Protiva emphasized the excellent network of partners in the field of electro-photonic components. “However, we’ve also launched our own activities in the field of photonic integration. With a key focus on optical transceivers, we launched a family of highly integrated multiplexers and will further expand this product line. These pluggable modules are required in large quantities in our own systems and provide increasing value for neighboring technology areas. With our activities around photonic integration, we are sustainably improving our cost base and opening new markets,” said Brian Protiva. The company aims for a revenue contribution from these modules to grow to 10% in the next three years and 15% in the next five years.

Cash flow generation and capital allocation for value creation
The company reemphasized its focus on cash and value creation. “Since the acquisition of MRV in 2017, we followed a clear path of deleveraging, even in times of high R&D spend and restructuring efforts to transition our production out of China as well as introduce our cost improvement measures. Every step we took was important to build the base for the returns we see already today,” said Uli Dopfer, CFO, ADVA. Already in 2019, ADVA relocated the majority of its China-based production facilities to other countries. “This was cost-intensive but an important step in responding to current geopolitical trends, such as US tariffs, deglobalization and the increasingly important question around products and country of origin,” explained Paulus Bucher, COO, ADVA.

The company introduced a cost improvement program in 2019 with the clear goal to keep OPEX stable in 2020. In the financial year 2020, OPEX was EUR 165.2 million, even EUR 5.3 million below the EUR 170.6 million the company saw in 2019. “Our cost improvement measures showed the expected effects, but, like many other companies, we also saw cost savings from lower travel activities due to the ongoing pandemic. However, the new normalized cost base will contribute to higher margin levels going forward,” Uli Dopfer emphasized. The CFO reported that gross margins in 2020 already benefited from the investments made in recent years.

The company improved its free cash flow from EUR 7 million to EUR 39 million in 2020 and reduced its debt from EUR 81 million to EUR 62.6 million year-over-year. “Without applying IFRS 16, which includes lease liabilities, ADVA is once again cash positive. With gross leverage of only 0.7x, we have a very solid balance sheet and investment-grade capital structure that gives us flexibility for strategic investments,” Uli Dopfer said. Higher volumes, the acceleration of ADVA’s transformation strategy, Covid-19 recovery and the OPEX improvement measures will set the path for new profitability levels and cash improvements. “Our clear goal is to reach a pro forma operating income of 10% of revenues by 2023,” Uli Dopfer stated.

ADVA has set clear priorities for capital allocation and driving shareholder value. “We will continue to translate our higher profitability into cash flow. Sustainability forms an integral part of our strategy, growth plans and management remuneration. Our solid balance sheet lets us think about strategic opportunities – but let’s do it step by step,” concluded Uli Dopfer as he finished the presentation.

Learn more about ADVA’s 2021 capital markets day here:

Forward-looking statements
The economic projections and forward-looking statements contained in this document relate to future facts. Such projections and forward-looking statements are subject to risks that cannot be foreseen and that are beyond the control of ADVA. ADVA is therefore not in a position to make any representation as to the accuracy of economic projections and forward-looking statements or their impact on the financial situation of ADVA or the market in the shares of ADVA.

About ADVA
ADVA is a company founded on innovation and focused on helping our customers succeed. Our technology forms the building blocks of a shared digital future and empowers networks across the globe. We’re continually developing breakthrough hardware and software that leads the networking industry and creates new business opportunities. It’s these open connectivity solutions that enable our customers to deliver the cloud and mobile services that are vital to today’s society and for imagining new tomorrows. Together, we’re building a truly connected and sustainable future. For more information on how we can help you, please visit us at

Published by:
ADVA Optical Networking SE, Munich, Germany

Contact information

For press:
Gareth Spence
t +44 1904 699 358

For investors:
Steven Williams
Tel.: +49 89 890 66 59 18

About Business Wire

Business Wire
Business Wire

Subscribe to releases from Business Wire

Subscribe to all the latest releases from Business Wire by registering your e-mail address below. You can unsubscribe at any time.

Latest releases from Business Wire

BridgeTower Capital Launches Security Token Pre-Offering and Announces Global Expansion With Key Partners15.4.2021 18:00:00 CEST | Press release

BridgeTower Capital, a tokenized global private equity firm, has launched a private Security Token Pre-Offering (STO) culminating 12 months of work to purposefully assemble a team of world-class partners to participate in the blockchain infrastructure and services marketplace in the rapidly growing world of decentralized finance (DeFi). BridgeTower also announced it has formed a Zurich-based entity to further expand its current offering of blockchain infrastructure products and services. BridgeTower launched its Private -STO campaign earlier this week, which provides an opportunity for accredited investors to purchase shares in the company in the form of a digital security. BridgeTower has received active participation already and is seeking to raise $200 million in this initial raise. “We are seeing a global confluence of public and private digital finance markets being fueled by the adoption of blockchain technologies. This is creating unique opportunities for those who can assemble

Cryptology Asset Group p.l.c. successfully completes a share capital increase and sale of treasury shares and reviews options for financing further growth15.4.2021 16:49:00 CEST | Press release

Cryptology Asset Group p.l.c. (ISIN: MT0001770107; Ticker: CAP), a leading European investment company for blockchain- and crypto-related business models, has successfully completed its cash capital increase by issuing 128,375 new shares and the additional sale of the entire amount of 31,625 treasury shares to institutional investors. At a fixed price of EUR 200.00 per share each, the Company will receive total gross proceeds of EUR 32.0 million, which will be used to invest in new portfolio companies from the Cryptology pipeline. The Company is also exploring the possible acquisition of crypto assets, such as Bitcoin, as part of its treasury management strategy. To finance further growth, Cryptology is also currently reviewing various options to raise additional capital, such as through the issuance of a convertible or a straight bond. ICF BANK AG has been commissioned to conduct a market review. Management will make the final financing decision based on investor feedback and the prev

Cryptology Asset Group p.l.c. resolves a cash capital increase and sale of treasury shares15.4.2021 16:45:00 CEST | Press release

The Board of Directors of Cryptology Asset Group p.l.c. (ISIN: MT0001770107; Ticker: CAP) today resolved to increase the share capital of the Company by 128,375 new shares and to sell 31,625 treasury shares which is the entire position Cryptology holds of own shares after the buyback done over the last months. Shareholders' subscription rights to the new shares and the treasury shares are excluded. The Company has entered into binding subscription agreements for the entire amount of in total 160,000 shares with several institutional investors. Closing of the transaction is expected for end of April 2021. The capital increase will be carried out in cash contributions and by partially utilizing the existing authorized capital. The share capital of the Company is to be increased from EUR 2,732,500 to EUR 2,860,875 by issuing 128,375 new bearer shares of the Company ("New Shares"). The New Shares will be issued with a pro rata amount of capital stock of EUR 1.00 per share and with full div

A Digital Transformation: Mary Kay Inc. Launches Immersive Virtual Experience Platform Suite 13 TM15.4.2021 15:03:00 CEST | Press release

Global beauty brand Mary Kay Inc. and its Mary Kay Global Design Studio present Suite 13TM, an innovative virtual beauty experience that leverages the use of virtual reality to digitize Mary Kay's first virtual pop-up showroom. Designed with the latest virtual reality technology, the new Suite 13TM offers Mary Kay Independent Beauty Consultants and their customers a 360-degree, 3D beauty experience where users can virtually browse the beauty brand’s portfolio of skin care as well as explore the company and its founder Mary Kay Ash’s history. This press release features multimedia. View the full release here: The new Suite 13™ offers Mary Kay Independent Beauty Consultants and their customers a 360-degree, 3D beauty experience. (Photo: Mary Kay Inc.) The new Suite 13TM invites users to tour through virtual “rooms”. Upon entering the “Lobby”, users can learn about the Company’s global legacy. The other virtual rooms include the “P

Conviva Works With ServiceNow to Provide Next Generation Customer Service for Streaming Customers15.4.2021 15:00:00 CEST | Press release

Conviva, the intelligence cloud for streaming media, today announced that its streaming insights data will be integrated with ServiceNow telecom and media industry solutions. This new integration will enable streaming providers to offer more reliable streaming services and personalized customer care experiences to drive user acquisition, reduce operational costs and increase customer lifetime value. This press release features multimedia. View the full release here: Conviva and ServiceNow Provide Next Generation Customer Service For Streaming Customers (Graphic: Business Wire) Conviva’s integration with ServiceNow extends ServiceNow’s offerings within the telecom and media industry and will help streaming customers to automate proactive case creation and ticket generation to identify and diagnose incidents across the entire video delivery supply chain. Adding this additional layer of automation to root cause analysis delivers im

Thales IoT SAFE to Secure Cloud Connectivity for New Internet of Things Services in Canada15.4.2021 15:00:00 CEST | Press release

Thales technology is at the heart of a new Canadian IoT project that is enabling instant, secure and scalable cloud connectivity for SIM/eSIM-enabled IoT. Working alongside TELUS, a leading Canadian wireless network operator, and the Canadian Internet Registration Authority (CIRA), the project’s certification partner, Thales is supplying SIMs and the IoT server, both compliant with the GSMA IoT SAFE specifications. This press release features multimedia. View the full release here: (Photo: Thales) The Thales IoT SAFE service offers an interoperable framework enabling swift deployment of IoT applications. Delivered in a plug & play SaaS mode, it benefits minimal integration effort. It creates a scalable and automatic environment for cloud data security of SIM-equipped devices with a remote management feature. TELUS continues its IoT expansion with devices across Canada, offering enterprises an innovative system that eliminates th

First Patient Enrolled in PROTECT IV Randomized Controlled Trial of Impella15.4.2021 14:03:00 CEST | Press release

Abiomed (NASDAQ:ABMD) announced today that the first patient has been enrolled in PROTECT IV, a large, prospective, multi-center randomized controlled trial (RCT) that is designed to provide the level of clinical evidence needed to achieve a Class I guideline recommendation for Impella in high-risk percutaneous coronary intervention (HRPCI). The first patient was enrolled at Ascension St. John Hospital in Detroit by Dr. Ted Schreiber, chief of cardiology at Ascension St. John Macomb-Oakland Hospital and Dr. Amir Kaki, interventional cardiologist and director of mechanical circulatory support at Ascension St. John Hospital. This press release features multimedia. View the full release here: Impella Clinical Pathway to Class I Guideline (Graphic: Business Wire) The two-arm trial will compare the benefits of HRPCI with Impella versus HRPCI without Impella support. The primary endpoint of the study is the composite of all-cause deat

In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.

Visit our pressroom