Slide 1: Full Year 2012 Results Communication
driving trust Mobile Near Field Full Year 2012 Results Communication Remy de Tonnac, CEO Richard Vacher Detournière, GM & CFO Secure Payments March 7, 2013 Digital Security Embedded Security Solutions 1 INVESTORS Fiscal PRESENTATION Year 2012 – SEPTEMBER Earnings Presentation, 2012 March 7, 2013
Slide 2: Disclaimer
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 othe
Slide 3: Agenda
Agenda 2012 key highlights Q4 Revenue and Full Year Financial Overview Strategic update and 2013 Outlook Q&A Appendix 3 INVESTORS Fiscal PRESENTATION Year 2012 – SEPTEMBER Earnings Presentation, 2012 March 7, 2013
Slide 4: 2012 key highlights
2012 key highlights Q4 Revenue and Full Year Financial Overview Strategic update and 2013 Outlook Q&A Appendix 4 INVESTORS Fiscal PRESENTATION Year 2012 – SEPTEMBER Earnings Presentation, 2012 March 7, 2013
Slide 5: 2012 key highlights
2012 key highlights • 2012 revenue of $122 m, in a very challenging and fast-changing competitive landscape • Adjusted operating loss of $30.1m, mainly impacted by the disappointing performance of the NFC business • Refocus of the company towards: • a differentiated NFC offering around Booster and p
Slide 6: Q4 Revenue and Full Year Financial Overview
2012 key highlights Q4 Revenue and Full Year Financial Overview Strategic update and 2013 Outlook Q&A Appendix 6 INVESTORS Fiscal PRESENTATION Year 2012 – SEPTEMBER Earnings Presentation, 2012 March 7, 2013
Slide 7: FY 2012 Revenue
FY 2012 Revenue 2012 2011 % Y-o-Y in thousands of US$ consolidated consolidated Mobile NFC 43 261 47 961 -10% Secure Payment 31 788 43 246 -26% Digital Security 46 158 60 261 -23% Embedded Security Solutions 840 - Total Revenue 122 047 151 468 -19% 2011 split 2012 split * Mobile NFC Mobile 32% Secur
Slide 8: Q4 2012 Revenue
Q4 2012 Revenue Q4-2012 Q4-2011 Q3-2012 % Y-o-Y % Q-to-Q in thousands of US$ consolidated consolidated consolidated Mobile NFC 11 612 23 304 9 043 -50% 28% Secure Payment 8 765 6 830 8 157 28% 7% Digital Security 10 047 14 520 11 383 -31% -12% Embedded Security Solutions 840 - - Total Revenue 31 264
Slide 9: 2012 Income statement
2012 Income statement 2012 2011 in thousands of US$ consolidated consolidated Revenue 122 047 151 468 Cost of sales (adjusted) (90 684) (109 056) • GPM down due to lower Adjusted Gross profit 31 439 42 412 revenue and less favourable product mix in % of revenue 25,8% 28,0% R&D expenses (adjusted) (3
Slide 10: Mobile NFC
Mobile NFC Revenue (in $k) Adjusted operating income (in $k) 47 961 -8% 43 261 (17 258) (30 451) (36%) (70%) 2011 2012 2011 2012 x % Adjusted operating income in % of revenue • 2012 revenue at $ 43m, down 8% y-o-y mainly due to Blackberry’s disappointing sales, delayed launch of Blackberry 10 and sl
Slide 11: Secure Payment
Secure Payment Revenue (in $k) Adjusted operating income (in $k) 43 246 (26%) (3 531) 31 788 (9 271) (11%) (21%) 2011 2012 x % Adjusted operating income in 2011 2012 % of revenue • 2012 revenue down by 26% at $31.8m, but H2 2012 increases annually by 15% and sequentially by 14%, vs. H1 thanks to reb
Slide 12: Digital Security
Digital Security Revenue (in $k) Adjusted operating income (in $k) 60 261 (-23%) 22% 46 158 13 153 14% 6 412 2011 2012 x % Adjusted operating income in 2011 2012 % of revenue • 2012 revenue down 23% at $46.2m on y-o-y basis, • This trend can be explained by different factors: Lower ID volumes in 201
Slide 13: Embedded Security Solutions
Embedded Security Solutions • Acquisition of ESS on December 1, 2012 for a cash consideration of $41.6m paid at closing* • Transaction in line with increased focus to reinforce the company’s position in the fast-growing embedded security solutions market. • opportunities with other business segments
Slide 14: Leveraging Combined Businesses and expertise
Leveraging Combined Businesses and expertise Example - Mobile Security: ESS provides security middleware and VPN, DRM apps that leverage INSIDE Secure NFC secure element. An “all in one” security package, adaptable to all mobile platforms VPN Secure communication VPN DRM Content Protection DRM NFC S
Slide 15: Embedded Security Solutions (cont'd)
Embedded Security Solutions (cont’d) • Transaction consideration: (in millions of $) Price paid at closing (1) 42,8 Estimated working capital adjustment at closing 0,4 Transaction consideration at closing 43,3 Final working capital adjustment (0,5) Additionnal payments upon completion of conditions
Slide 16: Cash flow 2012
Cash flow 2012 In millions of US$ Net proceeds Net income 130000 from primary excluding non- shares cash items Change in working Capital capital expenditures 5.9 Acquisition 110000 (24.9) (4.8) of ESS 17.7 90000 (41.6) 99.1 Other 70000 Change in working capital (inventories, (0.1) trade accounts rec
Slide 17: Cash flow H2 2012
Cash flow H2 2012 In millions of US$ 130000 Change in working Capital expenditures Acquisition capital Net income of ESS 110000 excluding non- cash items (16.3) (0.9) 22.3 90000 (10.2) (41.6) 99.1 Other 70000 1.2 95.5 Change in working capital (inventories, 50000 trade accounts receivable including
Slide 18: Balance Sheet
Balance Sheet • Net cash* of $60 m as of Dec. 31, 2012 • No deferred tax asset recognized related to tax loss carry-forward • Tax loss carry-forward as of Dec. 31, 2012 of $ 165 m Assets As of December 31, 2012 Equity & liabilities Goodwill 15 152 41 413 Acquired assets (SMS, ESS), net PP&E and inta
Slide 19: Strategic update and 2013 Outlook
2012 key highlights Q4 Revenue and Full Year Financial Overview Strategic update and 2013 Outlook Q&A Appendix 19 INVESTORS Fiscal PRESENTATION Year 2012 – SEPTEMBER Earnings Presentation, 2012 March 7, 2013
Slide 20: 2013: adapting to a fast changing environment
2013: adapting to a fast changing environment Strategic refocus and a tighter cost control through the proposed reorganization project worldwide . Given this challenging environment and repositioning, 2014 consolidated revenue target of approximately $400 million set at IPO no longer relevant, but s
Slide 21: Q&A
2012 key highlights Q4 Revenue and Full Year Financial Overview Outlook and Strategic Review Q&A Appendix 21 INVESTORS Fiscal PRESENTATION Year 2012 – SEPTEMBER Earnings Presentation, 2012 March 7, 2013
Slide 22: Appendix
2012 key highlights Q4 Revenue and Full Year Financial Overview Outlook and Strategic Review Q&A Appendix 22 INVESTORS Fiscal PRESENTATION Year 2012 – SEPTEMBER Earnings Presentation, 2012 March 7, 2013
Slide 23: Definitions
Definitions • Adjusted measures ─ Certain financial measures and performance indicators are presented on an adjusted basis as defined below. These indicators should be considered to be supplementary information, not substitutable for any other indicators of operating and financial performance that a
Slide 24: P&L reconciliation from IFRS to Adjusted 2012
P&L reconciliation from IFRS to Adjusted 2012 2012 Business Sharebased Other non- 2012 in thousands of US$ IFRS combination payments recurring costs adjusted Revenue 122 047 - - - 122 047 Cost of sales (93 580) 2 734 163 - (90 684) Gross margin 28 543 2 734 163 - 31 439 in % of revenue 23,4% 25,8% R
Slide 25: P&L reconciliation from IFRS to Adjusted 2011
P&L reconciliation from IFRS to Adjusted 2011 2011 Business Sharebased Other non- 2011 in thousands of US$ IFRS combination payments recurring costs adjusted Revenue 151 468 151 468 Cost of sales (112 004) 2 835 113 (109 056) Gross margin 39 464 2 835 113 - 42 412 in % of revenue 26,1% 28,0% R&D exp
Slide 26: Revenue H2 2012
Revenue H2 2012 H2-2012 H2-2011 H1-2012 % Y-o-Y % H-to-H in thousands of US$ consolidated consolidated consolidated Mobile NFC 20 655 38 657 22 606 -47% -9% Secure Payment 16 922 14 672 14 866 15% 14% Digital Security 21 430 27 779 24 728 -23% -13% Embedded Security Solutions 840 - - Total Revenue 5
Slide 27: Income statement H1 & H2 2012
Income statement H1& H2 2012 H2-2012 H2-2011 H1-2012 in thousands of US$ consolidated consolidated consolidated Revenue 59 847 81 108 62 200 Cost of sales (45 778) (61 515) (47 726) Gross margin 14 069 19 593 14 473 in % of revenue 23,4% 24,2% 23,3% R&D expenses (16 056) (18 154) (19 314) Selling &
Slide 28: Investor Information
Investor Information Contacts INSIDE Secure Brunswick INSIDE Secure Corporate communication Financial communication Investor relations Géraldine Saunière Jérôme Biscay, Alexandra van Richard Vacher Detournière Marcom Director Weddingen Directeur général finances +33 (0) 4 42 39 33 01 +33 (0) 1 53 96
Slide 29: driving trust
driving trust Mobile Near Field Communication Secure Payments Digital Security Embedded Security Solutions 29 INVESTORS Fiscal PRESENTATION Year 2012 – SEPTEMBER Earnings Presentation, 2012 March 7, 2013