Acquisition of Vormetric 19 October 2015

Transcription

1 Acquisition of Vormetric 19 October

2 Cybersecurity at Thales Cybersecurity consulting Managed cybersecurity services Mobile cybersecurity Data security (Thales e-security) 500m+ sales CAGR >10% 1,500 cybersecurity experts 2

3 Focus on Thales e-security A leading global provider of data protection Over 40 years experience securing the world s most sensitive information World's no. 1 in hardware security modules (HSMs) Operations in the UK, the US and Hong-Kong, a network of 300 resellers Combination of Thales and ncipher in 2008 Clients include 19 of the 20 largest banks in the world 3,000 financial institutions worldwide Leading technology companies A double-digit sales growth 3

4 Strategic rationale Increased digitalisation and connectivity Data are doubling in size every 2 years An increasing proportion of data is sensitive (IP, customer data, financial data ) Most of sensitive data is stored ("data-at-rest") 50% OF DATA IS SENSITIVE 95% OF DATA BREACHES INVOLVE UNPROTECTED DATA Protecting data is crucial PERIMETER PROTECTION IS NOT ENOUGH "Perimeter" security is insufficient Data themselves need to be protected Data protection market CAGR > 25% Thales + Vormetric: creating a world leader in data protection market 4

5 Vormetric in brief A private company, founded in 2001, based in San Jose, California Providing a comprehensive and unified platform of data security solutions that protect data-at-rest across physical, big data and cloud environments 1,500 customers worldwide, including 17 of US top 30 companies 2 of the top 5 American banks 2 of the top 5 retailers in America 3 of the top 5 US health insurers FY2015e sales (a) : US$ 75m, 30%+ CAGR over past 3 years A strong leadership team, 200 employees (90% in the US) 5 (a) FY2015 ends 30 April 2016

6 Vormetric technologies and go-to-market strategy A flexible solution 3 complementary go-to-market approaches 20% Technology licensing (2 leading IT companies) 25% Direct sales 55% Resellers 6

7 Significant synergies Capabilities synergies e-security World's No.1 in hardware security modules Vormetric Leader in software based data protection Payment protection Key management Application encryption Database encryption File encryption Tokenization Sales and marketing synergies Minimal customer overlap Leverage Thales global presence to expand Vormetric international sales Leverage Vormetric customer base and technology to grow Thales cyber sales 7

8 Key financial impacts Enterprise Value = US$400m EV/FY16e (a) sales = 4.3x In line with recent similar transactions (Raytheon/Websense, Belden/Tripwire) Lower than many public comparables (CyberArk, Qualys, Imperva, Proofpoint ) Does not take into account any synergies Assumes a sales CAGR >25% through 2020 in line with overall market growth Accretive to adjusted net result as from 2017 Fully consistent with stated M&A / capital deployment policy 8 (a) FY2016 ends 30 April 2017

9 Timetable Definitive agreements signed Subject to CFIUS approval Deal expected to close in Q

10 Thales / Vormetric: takeaways Data security at the core of cybersecurity Thales to become a global leader in data protection, trust management and data-centric security Accelerating Thales cybersecurity strategy Cyber impacts all Thales markets, both commercial and governmental Increasingly a differentiator for our offering Strengthening global profitable growth outlook of the Group 10

11 Definition of non-gaap measures This presentation contains non-generally Accepted Accounting Principles (GAAP) financial measures. Thales regards such non-gaap financial measures as relevant operating and financial performance indicators for the Group, as they allow non-operating and nonrecurring items to be excluded. Thales definitions for such measures may differ from similarly titled measures used by other companies or analysts. Organic: at constant scope and exchange rates. Book-to-Bill ratio: ratio of orders received to sales. EBIT: income from operations; plus the share of net income or loss of equity affiliates less: amortisation of intangible assets acquired (PPA). Emerging Markets: All countries in Middle East, Asia, Latin America and Africa Adjusted net income: net income, less the following elements, net of the corresponding tax effects: (i) amortisation of intangible assets acquired, (ii) disposal of assets, change in scope of consolidation and other, (iii) change in fair value of derivative foreign exchange instruments (recorded in "other financial results" in the consolidated accounts), (iv) actuarial gains or losses on long-term benefits (accounted within the "finance costs on pensions and employee benefits" in the consolidated accounts). Adjusted EPS: ratio of adjusted net income (as defined above) to average number of shares outstanding. Free Operating Cash Flow: net cash flow from operating activities, less: capital expenditures, less: deficit payments on pensions in the United Kingdom. 11

12 Thales Tour Carpe Diem 31 Place des Corolles Paris La Défense France This presentation may contain forward-looking statements. Such forward-looking statements are trends or objectives, as the case may be, and shall not be construed as constituting forecasts regarding the Company s results or any other performance indicator. These statements are by nature subject to risks and uncertainties as described in the Company s registration document ("Document de référence") filed with Autorité des Marchés Financiers. These statements do not therefore reflect future performance of the Company, which may be materially different.