ADVA AG Optical Networking Annual shareholders meeting 2001 August 28, 2001 Meiningen ADVA AG Optical Networking Annual shareholders meeting 2001 Executive report 1

Business development 2000 and 2001 Brian L. Protiva, CEO August 28, 2001 Meiningen Business development 2000 and 2001 2

Highlights of 2000 Sales growth of 189% to EUR 59.6 million Total end customers of 28 metro service providers (today 37) and ca. 500 enterprises New service provider wins, including Verizon, Swisscom, Torch Telecom, Hutchinson Global Crossing OEM partnerships with Cisco and Siemens Strategic marketing partnerships with Brocade, Compaq, and EMC Opening of regional sales subsidiary in Japan and sales office in Hannover Launch of FSP 3000 for metro networks

Highlights of 2000 Acquisition of Storage Area Networks, Cellware, First Fibre, and the Siemens Norway R&D team Strategic investment in OptXCon Recruitment of top-quality employees Appointment of Brian McCann as Chief Sales & Marketing Officer Increase in employees worldwide from 132 to 398

Overview Leading global provider of metro area and enterprise optical networking solutions Leveraging core technology to address exploding market for metro Aggressive growth strategy Clearly differentiated from competitors Technological expertise Broad product portfolio for enterprise and metro networks Blue-chip OEM partners and direct sales force State-of-art manufacturing capabilities Experienced management team

Metro optical network Metro Core (regional) Metro Access (access) ADVA Optical Networking is leveraging it’s strength in Enterprise customer applications, along with the core technology in optics, electronics and software, to address the exploding market opportunity for metro-area service providers. Enterprise/ Customer Premise (edge)

Optical networking market Market growth per region* (million USD) *(including metro core DWDM, metro access DWDM, enterprise DWDM, next-generation SONET, and metro optical Ethernet technologies) Source: Pioneer Consulting, Metro Optical Networks study, May 2001

Solutions that make sense Flexible and scalable Easy installation and set-up Powerful management and configuration tools Flexible service levels Cost-effective use of wavelengths Dynamic provisioning Protocol and bit-rate independence While the market drivers are clear, the right metro-area network solution must address the specific requirements to make the business opportunity a reality.   First, the network must support all protocols and interfaces demanded by both the (service provider) carrier and the enterprise network. Second, the network must support and scale to the architecture needed for the different applications. For example, while most data and storage networks are configured point-to-point, many are looking to migrate to ring or mesh architectures. Perhaps the most critical requirement is to deploy an optical network that provides a low total cost of ownership. While some look to this as just price, ADVA Optical Networking has focused on all of the key factors: -         Initial and total capital equipment cost -         Simple installation and fast operation -         Small space and power requirements -         Full integration to existing network management systems -         A broad range of scalability options and -         Full “five nines” reliability In addition, it is important that the high-speed services be provisioned with point-and-click software tools and offer end-to-end monitoring and protection. Of course, to deploy any new network, the solutions must be (available) deliverable today!!

ADVA solutions Low facility costs Intuitive end-to-end management Smallest physical footprint and lowest power consumption in the industry Intuitive end-to-end management Point-and-click provisioning and end-to-end management Low cost of installation True plug-and-play with fully integrated solutions Fast deployment Easy to upgrade with no customers downtime for faster provisioning Low initial investment Modular system concept at the most competitive price Low operational costs Reliable with 99.999% uptime and remote diagnostics and service upgrades

managed network termination ADVA solutions FSP 3000 FSP management suite Metro core SONET/SDH transport End-to-end seamless network management FSP 3000 FSP 3000 FSP 3000 FSP 3000 Broadband access transport for xDSL FSP 3000 ISP/ASP PoP access FSP 1000 FSP 3000 FSP 3000 FSP 3000 FSP 1000 Metro access LAN inter- connection Storage network interconnection FSP 500 FSP 1000 ADVA provides a family of metro optical networking products optimized for delivery of high-speed services. Our solutions allow service providers to cost-effectively provision services for flexible wavelength services, Broadband Access Transport and SONET SDH transport to name just a few FSP 2000 FSP 2000 FSP 500 FSP 500 Customer premise LAN interconnection/ managed network termination FSP 500/2000 Storage & private networking FSP 500/2000

End customers 37 service provider and ca. 500 enterprise end customers

VARS and distribution partners Distribution strategy OEM partners VARS and distribution partners Direct Focused direct touch model Key enterprise and service provider customers Business development team provides network consulting and RFQs/RFPs

Growth strategy Further expand customer base in the metro market FSP 1000, FSP 2000, FSP 3000 Execute flawlessly in R&D to drive technology leadership Facilitate growth through strategic relationships Expand sales and distribution channels Leverage expertise in manufacturing of optical networking systems

Challenges in 2001 Win back investor confidence Strengthen technology leadership Continue to strengthen market position in metro segment Win new customers, particularly service providers Achieve EBIT profitability Build up additional infrastructure resources Secure additional liquidity

Andreas G. Rutsch, CFO August 28, 2001 Meiningen Financial results 15

Summary 2000 and 1999 * Pro forma financial numbers are calculated prior to accounting for purchased in-process R&D, amortization of goodwill and purchased intangible assets, and non-cash charges related to the stock option programs.

Sales per product 3% Others* 1% OCM 3% CELL-ACE 1% Others* 5% FSP 500 11% FSP-I 77% FSP-II 1% Others* 49% OCM 13% FSP-I 37% FSP-II *Others includes ABRAXAS, MFOC, FOC, DiskLink

Sales per region 3% Asia-Pacific 8% Asia-Pacific 28% Americas 37% Europe 8% Asia-Pacific 28% Americas 64% Europe

Consolidated p&l statement (U.S. GAAP)

Consolidated balance sheet (U.S. GAAP)

Consolidated cash flows (U.S. GAAP)

ADVA employees worldwide 12 Apprentices 50 Administration, finance, IT 71 Sales, marketing, tech support 15 Quality management 99 Procurement, production 151 Research & development 4 16 21 6 43 42 Total 132 Total 398

Summary six months 2001 * Pro forma financial numbers are calculated prior to accounting for purchased in-process R&D, amortization of goodwill and purchased intangible assets, and non-cash charges related to the stock option programs.

Sales per product and region 1% Others* 4% CELL-ACE 11% FSP 500 11% FSP-I 65% FSP-II 8% FSP 3000 2% Asia-Pacific 22% Americas 76% Europe *Others includes ABRAXAS, MFOC, FOC, DiskLink

Consolidated p&l statement (U.S. GAAP)

Consolidated balance sheet (U.S. GAAP)

Consolidated cash flows (U.S. GAAP)

ADVA employees worldwide 15 Apprentices 53 Administration, finance, IT 90 Sales, marketing, tech support 16 Quality management 107 Procurement, production 158 Research & development 12 50 71 15 99 151 Total 398 Total 439

Organizational structure Newly-defined executive structure Brian L. Protiva Chief Executive Officer Brian P. McCann Chief Sales & Marketing Officer Stephan Offermanns Chief Operating Officer Andreas G. Rutsch Chief Financial Officer

Stockholder information Stockholder structure Investor relations Stockholder information Stockholder structure (August 20, 2001 – total 33.136.768 shares)

Outlook Continued focus on tightening cost structure Continued optimization of balance sheet and capital structure Qualitative growth and profitability Win back investor confidence

Explanation of agenda items Andreas G. Rutsch, CFO August 28, 2001 Meiningen Explanation of agenda items 32

Agenda items TOP 1: Submission of the approved adjusted annual financial statements, the group financial statements, as well as the management report of both the AG and the group for the 1999 financial year, along with the report of the Supervisory Board TOP 2: Submission of the approved annual financial statements, the group financial statements, as well as the management report of both the AG and the group for the 2000 financial year, along with the report of the Supervisory Board TOP 3: Approval of the activities of the Management Board during the 2000 financial year

Agenda items TOP 4: Approval of the activities of the Supervisory Board during the 2000 financial year TOP 5: Election of new members to the Supervisory Board TOP 6: Resolution regarding the amendment of the resolution concerning the issuance of convertible bonds to members of the Supervisory Board (2001 Supervisory Board Convertible Bond) and the partial cancellation of the creation of conditional capital, as well as a corresponding amendment to the Articles of Association

Agenda items TOP 7: Resolution to issue convertible bonds to the new members of the Supervisory Board ("2001 Supervisory Board Convertible Bond - II"), to create conditional capital and to amend the Articles of Association TOP 8: Resolution concerning the remuneration of the Supervisory Board TOP 9: Appointment of the auditor for financial year 2001 TOP 10:Resolution concerning the creation of additional authorized capital with a possible exclusion of subscription rights and amendment of the Articles of Association

Agenda items TOP 11:Resolution regarding the clarification of the 1999 Stock Option Program TOP 12:Resolution regarding the clarification of the 2000 Stock Option Program TOP 13:Resolution regarding the amendment of the authorization to issue stock options (UK Stock Option Program), as well as the amendment of the resolution concerning the creation of conditional capital and amendment of the Articles of Association TOP 14:Resolution regarding the amendment of the authorization to issue convertible bonds and stock options