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Company OverviewQ4 FY2011

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Forward-looking statements

Certain statements in this press release constitute forward-looking statements within the meaning of the

Private Securities Litigation Reform Act of 1995 and the applicable regulations of the Canadian Securities

Administrators. Such forward-looking statements involve known and unknown risks, uncertainties, and other

factors which may cause the actual results, performance or achievements of the Company to be materially

different from any future results, performance, or achievements expressed or implied by such forward-looking

statements. Such risks, uncertainties and assumptions include, among others, the following: our dependence

on the successful development and market introduction of new products; our ability to integrate any business,

technologies, product lines or services that we have or will acquire; our dependence on revenue generation

from our legacy products in order to fund development of our new products; current market conditions,

including the lack of liquidity in the markets and economic slowdown, may increase our operating costs or

reduce our revenue, thereby negatively impacting our operating results; our ability to operate profitably and

generate positive cash flows in the future; significant fluctuations in foreign exchange rates may adversely

impact our results of operations; our dependence on our foundry suppliers and third-party subcontractors;

order cancellations and deferrals by our customers; our substantial indebtedness could adversely affect our

financial position; the cost and accounting implications of compliance with new accounting standards; and

other factors referenced in our Annual Report on Form 20-F. Investors are encouraged to consider the risks

detailed in this filing.

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World-leading mixed signal chip technology for communications and medical markets

Communication products

~ 78% of revenue

Medical products~ 12% of revenue

**~10% of revenue derived from custom products

Mixed Signal Expertise is our

Competitive Advantage

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3. Strong & stable line circuitbusiness

1. Timing business growing atdouble-digit rate

2. Sole supplier of radios for wireless healthcare devices

• Dominates voice over cable market, winning share in DSL, growth opportunity in emerging economies

• Scale and relationships to help drive timing business

• Leading supplier of timing chips to support real-time services over wireless networks

• Expanding opportunity in optical transport networks

• Medical-grade radios linking in-body devices and programming/monitoring equipment

• Customer product introductions anticipated in FY12

Core Platforms Driving Growth3

High-bandwidth smartphone services driving timing opportunity

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Growth opportunity for timing – less than 10% of cell sites in U.S. converted to packet backhaul

• T1/E1 lines connecting base stations with network backbone unable to meet bandwidth demands created by new content & expensive to operate

Higher bandwidth, lower cost packet networks to connect cell sites and network backbone• Requires timing at base stations and routers to synchronize network and ensure services for new

and existing communication applications

Ethernet Backhaul

New High Bandwidth Content Overwhelming Traditional Networks

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Growing market opportunity for timing in optical network deployments

Carriers deploying optical networks to support multiple services over less infrastructure

• New ClockCenter platform supports all communication services over optical networks to help solve capacity and bandwidth issues in the core

• Zarlink single-chip solutions reduce design complexity and cost while improving performance versus competing multi-chip solutions

CPE & ACCESS METRO CORE

Wireless base station

OTN

Packet Timing

ClockCenter

Base station controller

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Only supplier of medical-grade radios for in-body use

• Designed into St. Jude Medical’s pacemakers and ICDs

• Large OEM in final approvals with devices integrating ZL radio

• Given Imaging capsule endoscopy in regulatory and insurance approvals

• Emerging customers deploying ZL radio in advanced applications

Ramping product introductions

• “Sticky” designs in products with 10+ year life cycle

Long-term revenue

WirelessHealthcare

• Joint R&D projects with leading medical device manufacturers

• High barriers to entry for competition

Driving long-term revenue opportunity for medical products

Zarlink low-power radio expertise enabling “always-on” patient monitoring

Ultra-low power radio enables wireless performance without impacting device battery life• “Always-on” patient monitoring potentially improves care & lowers healthcare costs• Designed into pacemakers and ICDs from leading OEMs, expanding opportunity in new wirelessly

enabled therapies, neurostimulation and body area network applications

• Zarlink radio enables high-speed data link between implanted device and monitoring equipment

• Requires no patient intervention

• Remote health and device monitoring, wireless link can be used to adjust performance

• During implant surgery, programming equipment remains outside sterile environment

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Radio solution for world’s only wireless endoscopy

Given Imaging PillCam approved for small bowel and esophagus examination, in approvals for colon cancer screening

Zarlink radio transmits video-quality images from PillCam to data recorder

• Over 1.2 million patients have benefited from PillCam procedure – a simple, safe and non-invasive alternative to traditional imaging of small bowel and esophagus

• Capsule for colon examination now in trials in United States, Europe and Japan

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Growth opportunities for our wireless medical expertise

Deep brain stimulation

Hearing assistance Neuro-stimulator

Energy harvesting

Defibrillator (ICD)/ Cardiac pacemaker

Drug delivery/Insulin pump

Bladder control

Functional stimulation

Wireless endoscopy

Gastric stimulator

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Zarlink has joint R&D projects with largest device manufacturers and emerging suppliers

Blood pressure

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DSL

FTTx

Hybrid

Cable

fiber

FTTx

fiberfiber

fiber

cable

copper

copper

NTT & Verizon

Belgacom

AT&T

China Telecom

Comcast & Rogers

Line circuit opportunities in telco and cable networks

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fiber

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Fiber deployments in developing countries driving demand for new line circuit solutions

Growth opportunity for line circuits – ~5% fiber penetration rate in China

Zarlink Next Generation Carrier Chipset (NGCC)

• Deployed in Multi-Service Access Nodes (MSAN) “pizza boxes” or pedestal at the subscriber in developing and under-developed countries, greenfield fiber deployments

• Field programmable, upgradable & remote line diagnostics support lower operating costs by reducing technical service calls

High-quality voice

over broadband

Line circuit at subscriber replaces functions traditionally supported at Central Office

Remote diagnosticslower operating costs

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Top priorities to accelerate growth

Revenue Growth from

Core Platforms

Revenue Growth from

Core Platforms

Grow Medical BusinessGrow Medical Business

Manage Product PortfolioManage Product Portfolio

Win designs across existing timing, medical

wireless and line circuit platforms, introduce derivatives to expand market opportunity

Launch new medical radio platform with

OEM, continue to expand relationships with St. Jude Medical, Given Imaging and emerging suppliers

Target 80% of revenue from core product

platforms, manage declining legacy businesses, increase gross margin

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Financial review

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Revenue and Gross Margin Performance

All values in USD unless otherwise stated*Company sold optical business May 17, 2010, so results have been reported as discontinued operations for current and comparative periods

$0

$10

$20

$30

$40

$50

$60

$70

Q2 F2010 Q3 F2010 Q4 F2010 Q1 F2011 Q2 F2011 Q3 F2011 Q4 F2011

0%

10%

20%

30%

40%

50%

60%Revenue Gross Margins

(In

mill

ions

)

$49.8 $50.0 $55.2 $58.7 $59.9

53%52% 51% 52%50%

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$19.3

$56.9

51%

$54.8

53%

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Cash position increased by $53.8 million over past four quarters

Generating strong cash flow

$128$124

$45 $45 $47$56

$62

$74

$99$109

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

Q3 F2009 Q4 F2009 Q1 F2010 Q2 F2010 Q3 F2010 Q4 F2010 Q1 F2011 Q2 F2011 Q3 F2011 Q4 F2011

($ in

mill

ions

)

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Income statement highlights*

$USD Q4 F’11 Q3 F’11 Q4 F’10

Revenue $54.8M $56.9M $55.2M

Gross Margin 53% 52% 53%

OPEX as % of revenue 40% 39% 39%

Net Income $17.0M* $34.6M** $6.8M

Non-GAAP Net Income*** $5.5M $7.4M $6.8M

Basic EPS $0.14* $0.28** $0.05

Non-GAAP Basic EPS*** $0.04 $0.05 $0.05

**For a full definition, see Company’s MD&A and Financial Statement and notes filings for the period ended March 25, 2011.

*Includes a $13.7M income tax recovery due to a reduction in valuation allowance related to deferred tax assets in Canada and the U.K. ** Includes a $17.3 million income tax recovery related to deferred tax assets in Canada and a $14.1M gain related to the sale of the Sweden real estate and a $0.9M F/X loss

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Outlook: F2012 first quarter guidance*

Revenue $54M-$56M

Gross Margin 51%-53%

Operating Expenses $21M-$22M

Net Earnings Per Share1 $0.01-$0.03*All values in USD unless otherwise stated1 Excluding any potential impact of f/x gains/losses related to the Company’s Canadian dollar denominated debenture and workforce redeployment costs

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Market data

Trading Symbol TSX: ZL

Market Cap. ~$300M

Share price $2.47 (05/17/11)

Shares outstanding 122M

52 week range $1.37- $2.66

Management, board and employee ownership

~3.0M common shares or ~2.5% of shares outstanding

Fiscal Year end March 31