driving trust INSIDE Secure Roadshow - London January 2014

Transcription

1 driving trust INSIDE Secure Roadshow - London January London Roadshow January 2014

2 Disclaimer This communication does not constitute an offer to purchase or exchange or the solicitation of an offer to sell or exchange any securities of INSIDE Secure. This communication contains certain statements that are neither reported financial results nor other historical information and other statements concerning INSIDE Secure. These statements may include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, events, products and services and future performance. Forward-looking statements are generally identified by the words "expects", "anticipates", "believes", "intends", "estimates" and similar expressions. These and other information and statements contained in this communication constitute forwardlooking statements for purposes of applicable securities laws. Although management of the company believes that the expectations reflected in the forward looking statements are reasonable, investors and security holders are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of the company, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements, and the company cannot guarantee future results, levels of activity, performance or achievements. Factors that could cause actual results to differ materially from those estimated by the forward-looking statements contained in this communication include, but are not limited to: trends in semiconductor and wireless communication markets; the company's ability to develop new technology and the effects of competing technologies developed and expected intense competition generally in the companies' main markets; profitability of expansion strategy; challenges to or loss of intellectual property rights; ability to establish and maintain strategic relationships in its major businesses; ability to develop and take advantage of new products and software; future acquisitions and investments; the ability of the company's to integrate acquired businesses, activities and companies according to expectations; the ability of the company to achieve the expected synergies from acquisitions; and changes in global, political, economic, business, competitive, market and regulatory forces. Moreover, neither the company nor any other person assumes responsibility for the accuracy and completeness of such forward-looking statements. The forward-looking statements contained in this communication speak only as of the date of this communication and the company are under no duty, and do not undertake, to update any of the forward-looking statements after this date to conform such statements to actual results, to reflect the occurrence of anticipated results or otherwise except as otherwise required by applicable law or regulations. 2 London Roadshow January 2014

3 Security for Business Innovation A world leader securing millions of devices and identities from the chip to the cloud An Innovator with unique security assets, essential IP portfolio (>650 patents) and strong R&D focus $122M revenue 2012 Global organization of 56% growth from 2010 circa 370 employees with European & U.S. development centers With more than 100 blue chip customers, INSIDE Secure serves a multi-billion unit TAM across non-cyclical, growing and diversified end-markets. Products incorporating INSIDE Secure are shipping in over 300M devices per year 3 London Roadshow January 2014

4 Restructuring and Repositioning around Embedded Security Acquisition of ESS Embedded Secure Solutions from Apple 122 M$ of revenue BlackBerry downfall / NFC integration start IPO made on NFC market prospects 20 million NFC chips delivered 151 M$ revenue and 400 people Acquisition of SMS Secure Micro controller Solutions division from Atmel MWC Innovation Award for NFC - investment from Nokia, Samsung, Motorola, Qualcomm 100 millionth PAYPASS chip to the US payment market 1st NFC chip VISA investment - 45 staff and 8 M$ revenue NFC technology invented by NOKIA Patent precursor of NFC technology Founded around contactless smart card technology 4 London Roadshow January 2014

5 INSIDE Secure s Mission To bring security to mobile and connected devices in order to enable new businesses and user experiences through the protection of content, transactions and IDs. 5 London Roadshow January 2014

6 Leadership in Multiple Categories Mobile security Mobile Payment Content protection Secure transactions Payment, ID, secure M2M, anti counterfeiting 6 London Roadshow January 2014

7 Market Trends Play to INSIDE s Strengths Mobile Communications High Security Smart Cards M2M / IoT* Fraud is increasing across applications that are becoming mainstream on mobile devices e.g. m-payments, content downloads, data communication, data storage Security becomes a key business enabler NFC : > 50% attach rate in smartphones NFC in the midterm will be integrated into connectivity combos (with BT, WiFi ) the Secure Element is a critical part of the NFC solution Secure smart cards market Well-established and steadily growing across payments, ID, Pay TV US migration to EMV Represents a sizeable short term market opportunity M2M, Internet of Things, Wearable Computing, Anti-Counterfeiting Represent a long term multi-billion unit opportunities Application-specific security requirements Security represents a major barrier to mainstream adoption in some applications * Machine-to-Machine, Internet of Things 7 London Roadshow January 2014

8 Two Divisions to Serve the Market MOBILE SECURITY A comprehensive suite of embedded security solutions for mobile devices combining IPs, hardware and software to protect enterprise, entertainment and payment applications SECURE TRANSACTIONS Tailored solutions based on secure microcontrollers, secure firmware and associated services to protect customers key assets Common R&D and IPs Common Operations Global sales force 8 London Roadshow January 2014

9 9 London Roadshow January 2014 Mobile Security

10 Mobile Security: Device Security Architecture Different applications require different security implementations M Payment Secure Element NFC VPN VPN Secure communication Trusted Execution Environment Application Processor DRM Content Protection 10 London Roadshow January 2014

11 Mobile Security: platform security chain CRYPTO-CELLS PACKET ENGINES RNGS EMBEDDED SECURE ELEMENT JAVACARD OS APPLETS SAFEZONE SECURITY TOOLKITS DATA ENCRYPTION EMBEDDED DRM EMBEDDED VPN DRM CLIENT VPN CLIENT MATRIX SSL PAYMENT SECURITY IP for COMPONENTS SECURITY COMPONENTS APPLICATION PROCESSOR PLATFORM OS (Android, ios, BB) APPLICATIONS INSIDE Secure is the only player present across the whole mobile platform security chain Provided by INSIDE Secure 11 London Roadshow January 2014

12 Secure Content Customers 1. Download INSIDE Player 2. Install 3. Watch 12 London Roadshow January 2014

13 Mobile Customers INSIDE SECURE PROVIDES NFC chips Secure IP VPN DAR INSIDE Secure VPN Client 13 London Roadshow January 2014

14 Semiconductor IP Customers 1. Silicon IP Source Code Intelligent Design High speed processing Low power consumption Standards-based Security Hardware-based device protection 2. Configurable IP integration Consumer Mobile Networking 3. Secure End- End Ecosystem 14 London Roadshow January 2014

15 Semiconductor Customers: Intel Case Study Intel Mobile Ambition Benefits Smartphones, Tablets, PCs & Ultrabooks for Intel: Access to INSIDE s software and core hardware technology for development of future products for INSIDE: Access to Intel ecosystem Revenues sources: licensing, NRE*, royalty payments for IP, sale of NFC chips 5-year strategic agreement signed in 2011 recognition of INSIDE s NFC expertise 15 London Roadshow January 2014

16 16 London Roadshow January 2014 Secure Transactions

17 Secure Access Addressing the needs of the most secure applications epassports, enational ID PayTV Conditional Access Secure Data Storage Payment cards Services: Middelware & Perso. ehealth Applications Secure Operating System VaultID VaultSec Logical Access Control Authentication Tokens Tamper Resistant Hardware Physical Access Control 17 London Roadshow January 2014

18 Payment US payment market committed to a migration to EMV chip secure solution #1 in US contactless market, with 300M chips delivered since 2006 Longstanding relationship with US banks Longstanding relationship with leading smartcards manufacturers 18 London Roadshow January 2014

19 Secure Transactions: Providing the Complete Security Solution Pre-certified security toolbox locks-down internet-ready devices like smart meters for the M2M and IoT markets Reduced time to market, with SSL internet secure platform on a chip security controller secure middleware IPSec Toolkits SafeZone 19 London Roadshow January 2014

20 Anti-Counterfeiting: Providing the Complete Security Solution Secure Database and Personalization Services Trusted VaultNFC Apps Secure NFC Tags with PKI VPN TEE Secure Communications with VPN 20 London Roadshow January 2014

21 Leadership Positions in Critical Markets MOBILE SECURITY SECURE TRANSACTIONS MARKETS 2012 TAM:300 M$ - CAGR of 25% a growing market of hundreds of millions devices driven by the BYOD trend and numerous M-applications in entertainment, enterprise and payment 2012 TAM:700 M$ - CAGR of 10% Established market of secure smart cards, ID, payment, Pay-TV IoT, M2M, anti counterfeiting represent a huge potential OUR OFFER Broad offering of crypto engines, software, silicon IPs, secure SOCs Customizable secure microcontroller platform with embedded SW. CLIENTS 21 London Roadshow January 2014

22 The INSIDE Secure Advantage: Security for the New Connected Paradigm End to End Security controls should span the ecosystem from the chip to the cloud, and be executed where they are most effective and cost-efficient. Software Security Solutions HW-Assisted Solutions Certified Systems On Chip 22 London Roadshow January 2014

23 23 London Roadshow January 2014 Financials

24 Revenue Q (in thousands of US$) Q Q % Y-o-Y % Y-o-Y normalized Mobile NFC % 133% Secure Payment % -37% Digital Security % -1% Embedded Security Solutions % Total Revenue % 27% Reported revenue, prior divisional reorganization in October 2014 Mobile NFC revenue mainly driven by shipments to BlackBerry Secure Payment continued to decrease as expected in Europe, while US EMV migration is yet to happen in volumes Digital Security below prior quarter as Q included major ID projects. YTD revenue is up 4% compared to 2012 ESS hits its highest quarterly revenue in London Roadshow January 2014

25 Revenue YTD September 2013 (in thousands of US$) 9 months months 2012 % Y-o-Y % Y-o-Y normalized Mobile NFC % 11% Secure Payment % -1% Digital Security % 4% Embedded Security Solutions % Total Revenue % 4% YTD 2012 split YTD 2013 split Secure Payment 40% 90.8 M$ Mobile NFC 35% Embedded Security Solutions 17% M$ Mobile NFC 30% Digital Security 25% Secure Payment 33% Digital Security 20% 25 London Roadshow January 2014

26 Income Statement H in thousands of US$ H consolidated H consolidated Revenue Favourable and evolving product mix Gross margin growth driven by ESS acquisition Significant gross margin improvement in Secure Payment Cost of sales (49 944) (47 726) Gross margin in % of revenue 29,4% 23,3% Adjusted Gross margin in % of revenue 37,9% 25,1% R&D expenses (19 263) (19 314) in % of revenue -27% -31% Selling & marketing expenses (10 770) (9 046) in % of revenue -15% -15% General & administrative expenses (4 991) (4 729) in % of revenue -7% -8% Other (losses)/gains, net (6 356) (603) Operating income (20 559) (19 218) in % of revenue -29,1% -30,9% Adjusted operating income (6 313) (16 178) in % of revenue -8,9% -26,0% On-going cost savings Incremental ESS expenses off-set by cost savings R&D expenses down in each segment except Digital Security and ESS. Flat level of S&M and G&A expenses (in % of revenue) Integration of ESS Savings in Selling & marketing and General & administrative expenses excluding ESS includes: $(6565)K restructuring expenses $342K exchange gains and losses on operational items. $(133)K other items 26 London Roadshow January 2014

27 Strong Balance Sheet Assets As of June 30, 2013 Equity & liabilities Goodwill Research tax credit (net of financing) PP&E and intangible assets Other receivables (net) Other non-current assets Working capital Trade receivables Inventories Equity Net cash * (45 959) Trade & other payables Other liabilities In $ 000 * See definition in Appendix 27 London Roadshow January 2014

28 28 London Roadshow January 2014 Appendix

29 Executive leadership team CEO Remy de Tonnac GM & CFO Richard Vacher Detournière COO Pierre Garnier GM & Corp. Secretary Pascal Didier EVP Mobile Security Simon Blake- Wilson EVP Secure Transactions Bernard Vian EVP Operations Damien Laroche EVP R&D Dimitrios Karayiannis CSO Simon Blake - Wilson 29 London Roadshow January 2014

30 Global Presence Seattle Toronto East Kilbride Helsinki Amsterdam Tokyo San Francisco Boston Aix-en-Provence Seoul Bangkok Taiwan Singapore Headquarters (Product, R&D, Sales) Sales & Service Offices R&D Facilities Fab and Operations (Contract) 372 employees worldwide 30 London Roadshow January 2014

31 Definitions Adjusted measures Certain financial measures and performance indicators are presented on an adjusted basis as defined below. These indicators should be considered to be supplementary information, not substitutable for any other indicators of operating and financial performance that are strictly accounting measures, such as those presented in the Group's consolidated financial statements Adjusted operating income/(loss) is defined as operating income/(loss) before (i) the amortization of intangible assets and masks related to business combinations, (ii) any potential goodwill impairment, (iii) share-based payment expense and (iv) non-recurring costs associated with business combinations carried out by the Group. Normalized revenue Net cash is defined as the revenue of the ESS business over the considered period regardless accounting impacts consecutive to the change of control of the ESS business that led to remove a portion of revenue. is composed of cash on hand, marketable securities, time deposits and derivative financial instruments, less obligations under finance lease, bank overdraft, bank loans. 31 London Roadshow January 2014

32 Investor Information Contacts INSIDE Secure Corporate communication Géraldine Saunière Marcom Director +33 (0) gsauniere@insidefr.com Brunswick Financial communication Jérôme Biscay, Mathilde Rodié +33 (0) INSIDE@brunswickgroup.com INSIDE Secure Investor relations Richard Vacher Detournière Directeur général finances contactinvestisseurs@insidefr.com Financial Calendar FY 2013 Earnings February 20, 2014 Website London Roadshow January 2014

33 33 London Roadshow January 2014